Jeremy Kritzer
Many fleet managers are aware of the global vehicle shortage and the challenges it’s causing for companies across the US.
News outlets have reported that a shortage of semiconductor chips is going to have a major impact on the number of vehicles available. In fact, according to Forbes magazine, “Some 5.2 million passenger vehicles will be lost from global production in 2021 because of the chip shortage,” which is going to have a major impact on fleet vehicle acquisitions (source).
This fact begs the question, have you thought ahead to 2022 and the new vehicles you’re going to need to keep your fleet operating efficiently?
In today’s blog, we’ll share how fleet vehicle acquisition has changed since COVID-19, and why it’s so important to choose factory ordering this year for your best chances at getting the 2022 vehicles you’ll need.
The truth is, COVID-19 is largely to blame for the vehicle shortage. Demand for new vehicles is high, but supply levels are lower than normal due to manufacturing issues directly linked to the pandemic.
This is exacerbated by the global semiconductor chip shortage which shows no signs of improving anytime soon. The entire vehicle market will be negatively affected, and for those who rely on fleet vehicles, the situation has the potential to negatively impact your business.
Now, you're probably asking:
This year, more than ever, it’s vital that you plan ahead and order your 2022 vehicles directly from the manufacturer. Take some time and determine how many new vehicles you’ll need next year, which models you prefer, and when you’ll need them.
But remember, you'll need to act fast.
We recommend that you get your orders in during the coming weeks, because if you wait too long, or rely exclusively on expensive out-of-stock purchases from dealerships to fill your orders, you may miss out on the vehicles you need for the year. A fleet management company, including the experts here at Ewald, can help you plan your vehicle replacement strategy and place orders directly with the manufacturer.
Every year vehicle manufacturers allocate a specific number of new vehicles for purchase. This year is no different, other than the fact that manufacturers will have significantly fewer vehicles to offer. Working with a fleet management company gives you your best chance of getting the 2022 vehicles you need.
If you don’t have a solid plan in place and end up waiting too long to get your order in, you’ll have to spend more time on acquisitions and scramble to get the vehicles you need to remain efficient next year.
If you do succeed in finding a vehicle in a dealer lot, it will likely come with more features and options than you, as a business, need.
These options are often very expensive and can have a major impact on your budget. Ordering from the factory allows you to set the terms, and get the exact make, model, features, and even color your business needs.
Dealerships are always more expensive than ordering through the manufacturer. They have additional costs including advertising, shipping and interest on the vehicle. When you order directly from the manufacturer, you don’t pay for any of these costs.
Factory ordering provides you with “locked-in” pricing, so no matter when you take delivery, the price will always be the same as when you first ordered it. Vehicles from the dealership, alternatively, are subject to “current pricing” and prices only go up during the model year.
When you order from the manufacturer, you’re also more likely to receive price incentives including volume discounts, which can be significant.
Finally, when you wait too long and don’t order from the factory, you’ll likely have to cast a wider net to find the vehicles you need. Often, this means you’ll have to search for vehicles in different states, resulting in additional charges, including significant transportation costs.
Before COVID-19 came along, you usually had a pretty good chance of finding a vehicle at a dealership when you needed it — even though the price might have been higher and it may not have been the exact vehicle you wanted. But because of today’s vehicle shortage, your chances of finding the right vehicle at a dealership when you need it, are vastly diminished.
When we say, “The Road Just Got Easier” we mean it. We pride ourselves on making our customers' lives easier and improving efficiencies through our complete suite of robust fleet management services, including our vehicle acquisition programs. We’re here to make life easier for you, so you can focus on running your business.
Planning ahead and ordering from the factory allows you to “set it and forget it.” This allows for staggered delivery according to your pre-established schedule. So you can keep your focus on your business, knowing the right vehicles, at the right price, will be delivered when you need them. It’s that simple.
It’s also important to note that our relationships and experience with vehicle manufacturers give us a distinct advantage when acquiring vehicles on our customers’ behalf, especially when vehicles are projected to be scarcer than ever.
If you have any questions about factory ordering your fleet vehicles this year contact us using the form below!
Jeremy’s automotive experience sets a great foundation for providing his customers with recommendations and decisions that fit their business needs. His role is to build long-standing relationships with his customers and consult them on successful fleet management programs.
In his free time, Jeremy enjoys spending time with his family, watching sporting events, and outdoor activities.
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