Every fleet manager seeks to minimize the number of out-of-stock purchases. However, there are instances when these purchases can't be avoided, such as accident replacement and unanticipated new hires requiring company-provided vehicles. Also, there has been an increase in out-of-stock orders, especially after many fleets have extended replacement cycling.
However, the downsized dealer network has caused searches for out-of-stock replacement vehicles to become more difficult. OEMs are building-to-order versus building-to-capacity. As manufacturers right-size production, dealer inventory has been substantially reduced. In fact, dealer inventory is at near-historic lows, with the industry averaging a 52-day supply of vehicles. (Traditionally, a 60-day supply was considered normal dealer inventory.) With production reduced to match demand, fleets attempting to purchase out-of-stock are increasingly competing with retail customers for product. In fact, some out-of-stock fleet orders have been cancelled so the unit can be sold to a retail customer.
Compounding this problem is that dealers are hesitant to sell to fleets because the sale does not count toward their retail allocation. This also works against fleets attempting to meet manufacturer volume incentives. Some dealers will agree to make a fleet sale, but will not report it to the OEM as a fleet unit. In these cases, fleets are not only denied volume incentive money, but some high-demand vehicles also offer no retail rebates, which further increases a fleet's out-of-stock acquisition cost.
Difficulty Locating Fleet-Appropriate Vehicles
The reduced number of dealers has made it difficult to locate dealerships that have models in inventory with fleet option packaging. Typically, retail models are over-equipped for fleet purposes. Nowadays, there is less flexibility in option choices. Dealer inventory is heavily weighted towards higher demand retail models and specifications. Fleets with very specific color requirements are finding it difficult to find appropriate units. This has lengthened the time to locate out-of-stock units, especially when a company has strict color and equipment guidelines. Increasingly, fleets are being forced to acquire vehicles that are the closest match to their specs. These vehicles are usually more retail-equipped, with options such as sunroofs, Bluetooth, and upgraded sound systems. This causes fleet managers to make hard decisions as to whether to introduce these "non-selector" options to the field to fulfill an emergency replacement, such as for a totaled unit. One unintended benefit is the additional equipment will, most likely, result in a higher resale at the end of the vehicle's service life. This inventory shortage provides an opportunity for fleet managers to "think out of the box." If it is difficult to locate a new vehicle that meets fleet specs, then perhaps a fleet should consider a pre-owned model. Isn't this what we already do when we reassign an in-service fleet vehicle to another driver? Factors favoring the acquisition of a pre-owned vehicle are a lower purchase price and reduced lifetime depreciation.
