Auto Focus

Need Fleet? Get in Line

For small fleets ramping up in the recovery, replacing work vehicles out of stock will be difficult with already tight dealer inventories—except if you’re looking for pickups.

Meeting the needs of small fleets that traditionally buy out of dealer stock is becoming an increasing challenge, according to the dealers that service them. "Now that business is better, there isn't any inventory," says one multi-franchise fleet dealer. "We're going to have one long, dry summer when it comes to new vehicles to sell."

That dealer used to carry 1,200 units of total inventory but is now down to about 250 new cars and trucks. "We'd rather have more inventory, but we can't get [the units]," he says.

On the demand side, this has not been a problem until recently. "In the last year or two, it's been a very negative atmosphere going out and knocking on doors," says a Florida Chevy dealer. "The response was, 'look out back, I have 12 empty trucks. Can you give me a buy figure on them?'"

A lot of those companies eventually went out of business. The ones that survived cut back from 10 to 25 trucks to six or seven, he says.

On the supply side, manufacturers are working through the Japan supply crunch and are upping capacity on some hot vehicles. However, in the post-recession economy and with a smaller manufacturing footprint, manufacturers are no longer building an excess of vehicles and then figuring out a way to sell them. Dealers say that manufacturers have been uncharacteristically quiet about capacities for the 2012 model year.

"Until manufacturers know for an absolute fact that business will be better, they won't increase production," predicts one dealer. "And for the dealers who took their inventories down to nothing, it's going to be a long trip back to a full lot."

On top of that, order-to-delivery times (OTDs) have been elongated in the supply shortage. One large fleet dealer's balance sheet reveals that OTDs have gone from eight to 10 weeks to 14 to 18 weeks, which has only further aggravated in-stock inventory issues.

CONTINUED:  Need Fleet? Get in Line
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Author Bio

Chris Brown

Executive Editor

Chris is the executive editor of Business Fleet Magazine and Auto Rental News. He covers all aspects of the fleet world.

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