The impacts of COVID-19 continue to reverberate throughout the fleet industry. Due to last spring’s assembly plant shutdowns, inventory for trucks, vans and SUVs at dealers is at a record low — down 40%, compared to pre-COVID levels.
At the same time, we’re starting to see the retail auto market recover. There has been a return of retail consumers shopping for new vehicles, however those buyers are not finding inventory available on dealers’ lots. Due to the low supply and increasing demand, we expect to see an impact on vehicle allocation, availability and lead times. We also anticipate early order cut-off dates, which may impact normal fleet ordering patterns this coming winter and spring.
I recommend all clients place orders early this year and not wait until 2021. Early ordering will help you avoid fleet order cut-offs that may come in spring. This is especially important for popular models of SUVs, crossovers, cargo vans and light-duty trucks. Replacing vehicles early is also a good strategy to help take advantage of the rebounding resale market.
Below are just a few of the impacts of which you should be aware.
COVID-19 Update: Ford
The 2021 Ford F-150 is receiving a complete redesign for MY21. As a result, there was an expected delay between the order cut-off on MY20 and the start of production on the MY21. Production of MY21 is expected to start between now and November. With this being a new model, we anticipate the potential for quality inspections and holds to impact delivery on the first orders. In order to maximize sales on the new F-150, Ford will have to balance allocation between fleet customers and dealerships, which are extremely motivated to rebuild inventory and have the newest models on their lots.
We are beginning to see published lead times increase on some of the popular fleet models. Ford’s lead time on the Escape has increased by two weeks over last year and their published lead time for Super Duties is now four weeks more than MY20.
COVID-19 Update: General Motors
General Motors has so many light-duty truck orders that they are scheduling for January and February production. The Silverado/Sierra lead time was pushed to 20 to 21 weeks, as opposed to last year’s 12- to 16-week timeline. GM has indicated order cut-off for MY21 Silverado/Sierra will come this January.
COVID-19 Update: Out-of-stock Inventory
The supply and demand imbalance continues to impact out of-stock acquisitions. The reduced inventory means there are fewer vehicles to choose from. Popular fleet vehicles with standard fleet equipment may not be available, which means client will have to pay more. Dealers are also less likely to trade as they look to maximize profits on the vehicles they have. As a result, multiple searches may be required to locate vehicles that best match clients’ needs.