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replacement vehicles

Fleet Pent-Up Demand in North America to Add Pressure on 2023-MY Ordering

 Demand for new- and used-vehicles will not abate any time soon due to the tremendous pent-up demand that will carry through calendar-year 2022. Industry-wide (both retail and fleet), it is estimated that there were 4 million vehicles worth of pent-up demand at the start of calendar-year 2022.

Dealer Consolidation Creates New Headaches for Out-of-Stock Purchases

Fleet managers try to minimize the number of out-of-stock purchases. But there are instances when these purchases can't be avoided, such as accident replacement and unanticipated new hires. However, the downsized dealer network has caused searches for out-of-stock vehicles to become more difficult and time-consuming. With OEM production reduced to match demand, fleets attempting to purchase out-of-stock are increasingly competing with retail customers. Is this the new reality?

The Dangers of Extending Replacement Cycles

Vehicle replacement policy is one of the most critical aspects of fleet management. Nearly all fleet-related expenses, both fixed and operating, are influenced by when a vehicle is replaced. In a recessionary economy, senior management demands expense reductions and there is pressure to defer vehicle replacements. However, such a policy change could actually prove to be counterproductive to the intended goal.

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