Automotive Fleet, October 2017

components said Crocker of Merchants Fleet Management There were also quality hold issues with new options or new parts One example was the new diesel engine offered by FCA In the end the issue with the diesel engine prevented it from being released which caused us to cancel all orders with that engine selected said Erculiani of Element One concern voiced by FMCs about quality holds has been the lack of proactive communication from the OEMs Quality holds were in line with past years but there is still a lack of communication from OEMs as to when these occur and what is affected It would also be beneficial to receive proactive communication to when a quality hold occurs what vehicles are affected and the anticipated duration of a quality hold One notable quality hold in 2017 involved the drive shaft for the Ford Transit said Crocker But on the whole the 2017 model year experienced a minimal number of quality related issues Union Leasing did not experience any significant delays due to quality control holds for 2017 orders said Carson Increased Vehicle Recalls During the 2017 MY the most noticeable OTD delays cited by Ghosh of ARI were related to vehicle recalls and repair delays caused by a shortage of replacement 5 parts This was seconded by Erculiani of Element With the increase in recalls since OEMs started to tighten quality measures there is a disconnect after recalls are issued and ownership of the recall said Erculiani Dealerships continue to be confused or lack direction for next steps on how to handle recalls Many do not understand how to handle fleet vehicle recalls and it ends up becoming an issue the fleet management company has to deal with LeasePlan USA agreed that recall campaigns played a major role in impacting 2017 OTD times Tightened regulations by the government in recent years have led all OEMs to demonstrate a higher level of caution and proactively implement recall campaigns to correct safety issues and avoid penalties said Smith of LeasePlan USA Weather Related Delays A perennial factor impacting fleet OTD has been weather related disruptions of the transportation system The data collected from this years survey was prior to the 6 impact of hurricanes Harvey and Irma both of which occurred at the tail end of the 2017 model year Prior to Hurricanes Harvey and Irma calendar year 2017 experienced relatively milder and warmer weather Fewer weather related events resulted in fewer uncontrollable OTD delays For instance with a relatively warmer winter across most of the country there were fewer snow related delays at ramps and plants This year shipping delays due to weather were mainly a result of flooding in various parts of the country said Krams of Wheels California was particularly hard hit with rainfall and extensive flooding during winter leading to congestion at ramps in the region for several weeks before railways and roadways were cleared and vehicles could start shipping again Some vehicles experienced weather related delays of 30 days or longer One of the more significant weatherrelated issue impacting OTD was hail damage especially to vehicles awaiting driver pick up at dealership There were significant spring rain storms in the southern region which delayed deliveries to drivers due to hail damage and dealers impacted by local flooding The hail storms that swept through the southern states in the spring were the most impactful for the year said Erculiani of Element Making a similar observation was Ghosh of ARI There were flood issues in Kansas City market which slowed shipping in and out of the area for a brief period of time Additionally there were a number of areas where hail had a notable negative impact on OTD waiting for hail damaged vehicles to get repaired Jim Tangney vice president of vehicle acquisitions for Emkay also cited hail related issues impacting 2017 OTD Hail damage to vehicles at dealerships and occasionally while in transit resulted in significant downtime at dealerships said Tangney At the start of the 2017 model year there were OTD delays due to Hurricane Matthew We experienced some delays because of Hurricane Matthew in October 2016 A combination of flooding power outages and impassable roadways caused some delays throughout Florida Georgia and the Carolinas said Tangney Fortunately there was little to no damage to actual inventory so the issues were resolved rather quickly once the roadways were cleared and safe for travel once again Weather related issues are accepted by most fleet managers as the cost of doing business but milder weather conditions in 2017 were welcomed by fleet managers But on the whole all FMCs agree that it was a relatively quiet year for weatherrelated delays As with almost every year we have seen slight delays in delivery due to the occasional winter storm local flood or everybodys favorite late spring early summer hail storms Although our usual seasonal delays occurred for the 2017 MY we have not had any major weather events heavily impact order to deliveries said Wallace of LeasePlan USA This was seconded by Carson of Union Leasing Overall weather was fairly tame this past model year As a result Union did not experience any noticeable delays The consequence of weather related delays on 2017 model ordering was best encapsulated by Armstrong of Mike Albert Fleet Solutions who summarized the impact as nothing substantial AF 18TH ANNUAL OTD SURVEY PART 2 AUTOMOTIVE FLEET I OCTOBER 2017 32