Automotive Fleet, July 2017

our normal vehicle cycling In effect our purchase levels are staying the same but because we are now combined it only looks like we are buying more said one fleet manager who wished to remain anonymous As a baseline many fleets anticipate making a comparable buy as last year but increased business activity creates the possibility of a further increase later in the model year Our goal is order at least the same number of vehicles as last year but hopefully it can grow to 10 20 more than MY 2017 said Scott Darling director of fleet for TruGreen in Memphis Tenn In addition to business growth a recurring theme is that many fleets are seeking to replace aging units that have been kept in service for longer than normal mileage guidelines The need to replace older inventory was repeated by many companies responding to the survey We will be acquiring more vehicles as we are reintroducing a cycle policy that was suspended several years ago said Amy McAdams CAFM corporate fleet manager for ABM Industries Another company increasing its 2018 MY orders to weed out long in the tooth models is AmeriGas Propane We are purchasing new assets as we recognize the vehicles they will replace will be another year older However we are building at less than last years pace in overall new build vehicle count and dollars spent said Jay Massey CPIM corporate fleet vehicle manager for AmeriGas Propane Other companies are cycling out some medium duty diesels ahead of schedule and replacing them with gasoline powered trucks Fleet managers report that reliability of diesel trucks continues to significantly impact cost productivity and driver morale Another reason for acquiring more vehicles is due to the timing of a companys standard replacement cycles for light duty vehicles Still another reason is due to internal reorganizations and the reclassification of additional employees to be eligible to receive company provided vehicles We will be acquiring more vehicles in model year 2018 We are rolling some people in from allowance programs to company vehicles said Peter Belloli CAFM associate manager sourcing fleet USA Canada for MilliporeSigma Factors Putting Downward Pressure 2018 MY Fleet Orders The U S economy is diverse and while current economic conditions may be generating growth for some there are other industry segments experiencing slow or static growth There were a variety of other reasons given for reduced or for no change in new vehicle orders for the 2018 model year For instance many larger fleets have multi year purchasing agreements which sets the parameters of what will be acquiring during the next several years Another reason is shortcycling which accelerates vehicle replacement cycling Although this is occurring less due to the softening resale prices Last year General Mills replaced its entire sales fleet which will result in a substantial decrease in its 2018 MY fleet volume I will acquire a much smaller amount of units this year I replaced my entire U S sales fleet in 2016 so my oldest sales vehicle is a 2016 said Adam Orth CAFM manager of fleet services for General Mills Inc Another company that recently shortcycled its fleet was Liberty Mutual Group which will impact 2018 model year ordering We will be acquiring fewer vehicles due to the previous years accelerated replacement initiative said Kate Duffy fleet program manager for Liberty Mutual Group Internal reorganizations will also influence new vehicle purchasing volumes This can sometimes result in no vehicles being ordered Some companies are studying vehicle utilization and are looking to downsize overall fleet size We will be buying close to the same number of vehicles for 2018 model year Maybe 20 fewer due to downsizing said Michael Swenson fleet coordinator for McDonalds Corporation Another factor was the massive recalls especially with Volkswagen diesel models We had to replace 2000 plus VW diesels in 2017 due to the buyback emission issue in addition to our regular buy so next year we should have much less vehicles to replace said one fleet manager who wished to be anonymous Corporate reorganizations are another factor exerting downward pressure on 2018 fleet buy at some companies We will be acquiring fewer vehicles due to some reorgs and bringing fleet drivers in from the field which eliminates their eligibility to have a company vehicle said a fleet manager who requested anonymity Fleet Purchases will Remain Unchanged at Many Fleets The majority of the surveyed companies will not make dramatic changes to their new vehicle orders and will keep acquisition volumes at that same level as the prior model year which was a strong year for fleet orders We will be acquiring about the same as last year maybe a couple more said Jim Bigelow senior director Enterprise Fleet for Cox Enterprises Inc Corporate mergers and acquisitions of other companies is also playing a role in keeping purchasing volumes relatively static year over year While the majority of companies are taking a steady as you go vehicle acquisition strategy some companies are looking to make dramatic changes to their replacement cycling parameters We will acquire about the same number of vehicles with a caveat that we have been slowly reducing our fleet of commercial motor vehicles CMVs and expect that to continue said Sam Besser fleet manager for Coinstar LLC AUTOMOTIVE FLEET I JULY 2017 18 acquisition BELLOLI MilliporeSigma DARLING TruGreen DUFFY Liberty Mutual Group ORTH General Mills KAMANNS Ingersoll Rand SWENSON McDonalds BIGELOW Cox Enterprises