Automotive Fleet, October 2018

Shipments from Mexico One OTD problem that seemed to carry over from the 2017 model year were delayed shipments for products built in Mexico With the dramatic expansion of automotive production in Mexico it has led to railcar shortages at plants south of the border that export production to the U S Since Mexicos domestic retail market is relatively small with 900000 units sold per year the overwhelming majority of vehicles assembled in Mexico are earmarked for export Looking at the averages throughout the industry some of the major delays in OTD were experienced by models produced in Mexico including the Jeep Compass Ram ProMaster and Ford Fusion There were also widespread railcar shortages that resulted in many models being delayed for an extended period of time said Jim Tangney vice president vehicle acquisitions for Emkay This observation was also made by Mary Jo Welch assistant vice president of new vehicle acquisition for Enterprise Fleet Management Overall OTD times were similar between this model year and last model year However we saw increased OTD with vehicles coming out of Mexico We also did see some challenges at the end of the 2018 model year especially for work trucks and vans said Welch While OTD times are steady across most vehicle lines the vehicles with the longest delays are the truck and van segments Some truck models were impacted more than others Particularly hard hit this year were Ram HD models where we saw orders take months to get scheduled as FCA was working to obtain fleet allocation from other market segments said Krams of Wheels This was in large part due to very limited fleet allocation which resulted in orders sitting unscheduled for months as FCA worked to get allocation from other markets Compounding the problem were unscheduled plant closures This played a big part in delivery delays for FCA trucks The Ram pickup trucks were delayed due to the Saltillo Mexico plant closure and its limited fleet allocation In some instances vehicles that were ordered were not produced for several months Trucks with diesel engines also experienced delays as vehicles were held while they awaited for approval from the EPA said Gomez of Donlen The Ram ProMaster had major delays attributed to the U S Postal Service project where vehicles were shipped to Utilimaster in Saltillo Mexico for upfitting In the middle of the project the upfit specs had changed causing a backlog at Utilimaster which resulted in fleet orders being delayed Other surveyed FMCs also cited the impact of unscheduled closures of automotive assembly plants The Saltillo assembly plant in Mexico which produces the Ram 2500 5500 was closed the entire month of April This was an unscheduled closing however there was minimal delays in getting the units into the U S said James Crocker director of fleet operations for Merchants Fleet Management Factors Impacting Truck OTD Fleet vehicles are particularly vulnerable to OTD delays because most fleet orders are concentrated among a handful of models Two key vehicle segments for commercial fleets are trucks and vans which had a variety of factors impact OTD in model year 2018 This year we saw a number of factors come together to result in increased lead times on most truck models said Krams of Wheels Changes in assembly plant locations and redesigned 2019 models led to early cutoffs with extended gaps in ordering In addition the active hurricane season last fall and the improved economy led to increased demand for trucks overall Lead times on orderable trucks increased to more than 18 20 weeks and there was a large influx of customers requesting trucks from dealer stock According to Steve Armstrong manager vehicle purchasing for Mike Albert Fleet Solutions the top factors impacting 2018 OTD were logistics scheduling issues such as vehicles held at rail yards or ports for lengthy period and vehicles damaged in transit Transport related issues were the main cause of delay in vehicles reaching the delivering dealer in MY 2018 Units would be bayed for several days with no ETA as to when they would move ETAs were only supplied once the vehicle had been picked up said Armstrong The railcar issue not only impacted getting units to upfitters but likewise delayed getting completed units back into the OEMs transportation system Particularly hard hit were the truck and van assembly plants and ramps The plants were so backlogged with vehicles that car haulers were unable to bring vehicles to upfitters as they could not bring completed vehicles back to the plant because they were out of space We saw some vehicles age for over 60 days with no movement and worked diligently with the OEMs to prioritize aging vehicles for shipment In some cases we used outside carriers upon upfit completion to deliver vehicles to end destinations to avoid the ship thru process and the delays said Krams of Wheels AUTOMOTIVE FLEET I OCTOBER 2018 20 19TH ANNUAL OTD SURVEY VAN 2018 ORDER TO DELIVERY TIMES VAN MODELS 2018 MY OTD DAYS 2017 MY OTD DAYS CHANGE DAYS 2018 Chrysler Pacifica 61 57 4 2018 Dodge Grand Caravan 62 62 0 2018 Toyota Sienna 71 64 7 2018 Ram ProMaster City 77 82 5 2018 GMC Savana combined 91 69 22 2018 Chevrolet Express combined 95 100 5 2018 Mercedes Benz Metris 95 N A N A 2018 Nissan NV combined 102 117 15 2018 M B Sprinter combined 107 N A N A 2018 Ram ProMaster combined 115 113 2 2018 Ford Transit combined 117 114 3 2018 Ford Transit Connect 165 100 65 SOURCE AF RESEARCH DEPT ARMSTRONG Mike Albert CROCKER Merchants WELCH Enterprise TANGNEY Emkay