Car price increases and no price lock in are damaging fleet/OEM relationships.  -  Photo: Shutterstock

Car price increases and no price lock in are damaging fleet/OEM relationships.

Photo: Shutterstock

Fleets are facing an increasingly difficult relationship with OEMs, with discounts rolled back and price protection ignored.

The challenges, highlighted by the Association of Fleet Professionals (AFP), center on OEMs looking to channel stock availability to more profitable retail along, and constantly increasing prices with no promise of price lock-in when the cars are delivered 12 months down the line.

According to AFP chair Paul Hollick, some AFP members saw price uplifts affecting more than 80 different models on fleet choice lists, in some instances exceeding £10,000.

“Clearly, we are living through a time when there is substantial upwards pressure on prices generally and we understand the many reasons why this is happening,” he said. “But some manufacturers leave fleets essentially unsupported, ignoring existing discount agreements and refusing to honor price protection pledges.”

Hollick said it meant AFP members were facing a complex administrative task as they tried to track continually rising prices, adding, “It also brings the strong possibility that an employer will no longer be able to bear the cost of a car that a driver has already chosen and ordered.”

He said this ongoing price escalation was damaging fleet/OEM relationships and wanted to see pricing held for agreed periods and for that price to be honored. “Treating prices as something that can be increased substantially without discussion is no way to treat major, long-term vehicle buyers.”

The issue of fleet/OEM relationships forms part of the video discussion between Hans Damen, managing partner of Fleet 360, and Global Fleet Management editor Mike Antich in the video Inflationary Pressures Across Europe and North America.

“Have OEMs forgotten about the support of fleets?" Damen asked. "Even when the economy was poor, corporates kept buying cars. And that is part of the frustration. Have OEMs forgotten about our role and the stability that we provide? All of a sudden it feels opportunistic to focus on the private buyer.”

Hollick added that fleet managers want sustainable long-term business partnerships but the behavior by certain car makers was “undeniably damaging for future relationships.”

Originally posted on Global Fleet Management

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