Preventive maintenance (PM) expenses in calendar-year 2016 were flat compared to 2015, primarily because of extended oil-drain intervals.
Improvements in engine design and onboard vehicle technology, along with improved oil quality, are allowing fleets to extend oil-drain intervals. In addition, there continues to be enhancements to OEM oil-life monitoring systems, which enable extending oil-drain intervals and reduce driver downtime. The onboard oil monitoring system of some models, which reflects actual driving patterns, often allows for even longer oil drain intervals.
However, more stringent motor oil requirements by OEMs have put upward pressure on PM costs.
“While preventive maintenance costs were largely flat, we are seeing some impacts from manufacturer oil specs,” said Dan Cappe, consultant, strategic consulting services for Element Fleet Management. “With oil, the cost of the specific oil often offsets the savings of extended service intervals, increasing the importance of regular oil level checks.”
Over the past decade, conventional motor oil usage has diminished in favor of synthetic oils, which have become required by some OEMs. For instance, the proliferation of smaller displacement engines in many fleet applications is putting pressure on fleet managers to use synthetic oil to maximize engine life.
In 2016, OEMs made no major changes to scheduled maintenance programs, which kept PM expenses flat from 2015 to 2016.
Also contributing to PM costs remaining flat has been fleet adherence to OEMs’ scheduled preventive maintenance programs. This, along with improved vehicle quality, has positively impacted maintenance expenses in 2016 and promises to stabilize maintenance expenses in 2017.
Another factor contributing to stable PM cost is that labor rates in 2016 were flat compared to 2015. However, wages in the U.S. increased 3.57% in December 2016 over the same month in the previous year. In addition, the economy is growing stronger in certain regions and there is pressure on employers in labor constrained industries to offer higher salaries to be competitive in a tight labor market. In particular, the ongoing shortage of automotive technicians will exert upward pressure on labor rates, especially in high-cost-of-living metro areas.
Misconceptions about PM
One common misconception by drivers is that PM only involves oil changes.
“Oil changes aren’t the only PM,” said Jim Sassorossi, director, fleet services and parts operations for FCA US. “Nowadays, tire rotations are often more frequent than oil changes. It is important to have vehicles PM’ed on a schedule.”
Throughout the fleet industry, oil drain intervals will continue to lengthen as older fleet models are retired from fleet service.
“With improvements in engine technology and engine oil, we’ve seen lengthening oil changes, and that is going to continue. For older models, as they upgrade, they will transition into longer intervals,” said Sassorossi. “What’s important to remember, especially in the commercial and vocational markets, is that tires may need to be rotated more often than the oil is changed. That’s something we counsel our fleet customers about, so they don’t get tagged with an unexpected tire expense down the road.”
One OEM focus has been to expand its presence in the fleet PM market by expanding the number of express service lanes at dealerships.
“The single biggest initiative for Mopar last year, in regards to our fleet business, was the kickoff in April 2016 of our Fleet Preferred Mopar Express Lane program. We have more than 1,000 dealerships with Mopar Express Lane service around the United States that now offer national pricing for fleet customers,” said Sassorossi.
The Mopar Express Lane program is designed to provide fleet customers support in three areas: increasing uptime, assisting in driver safety, and offering competitive pricing.
“We do this by providing a nationwide network of factory-trained technicians and O.E. parts manufactured by the people who know the vehicles the best, which is a huge plus in driver safety,” said Sassorossi. “Mopar Express Lane service gets customers in and out the door quickly, which increases uptime. And our program’s national pricing matches the aftermarket.”
Another FCA initiative in 2016 was to expand its BusinessLink network.
“We’re up to more than 1,000 BusinessLink dealers who are enrolled and trained to specifically support fleet business customers by maximizing uptime and getting the job done right the first time so vehicles stay on the road, where they need to be,” added Sassorossi.