MY2024 Acquisition Planning and Supply Chain Update
By Hasnain Jetha
May 11, 2023
What We Know So Far: The Good, the Bad and the Ugly
Last year, manufacturers adjusted to shortages by either cancelling orders or building units without certain options and components. The heavy demand and limited supply forced OEMs to cut off ordering early or extend production. While there will still be challenges this year, and we continue to recover from the COVID era loss of 3.6 million new vehicles, the good news is that this year’s production is expected to be up by about 5-10 percent throughout the industry. With retail sales softening, there’s the potential for more fleet allocation. A hopeful sign is that some OEMs are coming back to fleet.
However, this will not be a return to 2019. A recent McKinsey and Company article stated that they see “no end in sight to the supply-demand mismatch”. We do foresee a balancing act where pre-approved allocation will continue for MY2024 for most OEMs and there will be some similarities to MY2023. While the expectation is that by next year supply will improve further for fleet, even with improvements, we will continue to see the pressures of more demand than vehicles.
Wheels remains on top of the current status of the industry through weekly meetings, regular conversations with the OEMs, and increased staffing. Navigating the supply chain is a top priority in supporting our clients.
Returning to Fleet Sales
We are seeing that some of the OEMs who limited fleet availability in the past few years are beginning to open up options for fleet: Nissan, Hyundai, Polestar, Toyota and Tesla are offering some lines to customers. These are, indeed, promising signs.
Availability Varies by Vehicle Type
Additionally, availability is dependent upon the vehicle type needed. Heavy demand for pickups, work vans and hybrid vehicles, which are in limited supply due to battery constraints, will almost certainly cause OEMs to cut off orders early in some cases and extend order banks in other cases. This will most likely continue through MY2023 and possibly into MY2024.
Factory Ordering Update
Some practices of recent years will necessarily continue. Pre-approval and allocations will vary with OEMs dependent upon the model type and client order history. New or adjusted order cutoff dates may be announced with little or no notice. We expect order cutoffs to be earlier than in “normal” order cycles.
OEMs will again be building some vehicles without certain options and accessories due to continued supply chain challenges. As mentioned above, truck, van & EV production will be limited and have shorter ordering windows. We will see longer lead times and buildout production timeframes.
Out of Stock (OOS) Purchases
Dealer inventory is improving but still at half of 2019 levels. Expect the longer timeframes for sourcing OOS units to continue. Vehicles with higher equipment specs have the most availability. Since dealers may be unwilling to sell their limited inventory to fleet customers, their pricing will often be over MSRP.
Rising Prices Will Continue
All of these factors, as they have in recent years, will result in higher prices and lower incentives across all OEMs. Our expectation for price increases is 3-10 percent YOY. Expect multiple price increases throughout the model year, lower client incentives from all OEMs and few, if any, price protections. Even with dealer inventory slightly increasing, dealers are expected to continue commanding full or close to MSRP pricing.
Persistent Delivery Delays
And as we’ve detailed in previous articles, logistical problems such as the tight labor market and railcar shortages continue to impact delivery of all vehicle types to drivers. The long term impact from the pandemic is still being felt in our industry—the volume of delivered vehicles in dealers’ lots is steadily rising.
Ordering Updates by OEM
|GM MY2024||GM Ordering – MY 2024 ordering will be by pre-approved allocation only. Order banks are open on some models for both US and Canada. |
Price increases are expected throughout the year which makes ordering early a good idea.
EVs – Expect limited production of EVs in CY2023 for EV Silverado, Equinox and Blazer. The EV supply in Canada will lag behind US availability.
|Ford MY2024||Order bank open dates by model|
Ford Transit and E-Transit – TBD
Super Duty (F250/F350/F450/F550) US: 7/17/2023
F-150/Lightning – TBD
Other Models – Order Bank open dates
Ford Edge – 5/23/2023
Transit Connect – CANCELLED·
Allocation/Pre-Approval – Ford is implementing an allocation/pre-approval process for all Fleet vehicles, van and truck orders. They will be offering Mach E to fleets.
Pricing and Incentives – CPA programs will not include price protection to intro pricing. While there will be improved production capacity, expect incentives to remain low.
|Stellantis MY2024||For MY2024 Stellantis expect:|
MY 2024 information to be available in late June.
No customer allocation process; MY2024 ordering will be open to all Stellantis customers.
Keep in mind that MY2023 was over-subscribed.
Retail dealership inventory has increased.
VIP Program will be finalized and FCA/Stellantis field reps will begin talking/working with clients by the second or third week of June.
Canada will follow US on timing.
The Promaster CITY is cancelled. FCA has alluded to a solution in the near future, but expect that it will be two to three years in the future.
FCA is excited to bring to the market the following EV vehicles:
RAM REV (BEV Truck) in CY2024
E-ProMaster in late 2023
US MY 2024 ordering will be by pre-approved allocation only.
Toyota is working directly with customers on volume and anticipated needs.
Toyota US will approve new clients this year on a strategic basis.
Allocation will be based on a four year ordering history. If you want to order a model other than what you’ve ordered in the past, you will need to let your Toyota rep know.
Hybrid demand continues to stay strong, and Toyota is focusing on accelerating BEV vehicles.
Pricing and incentives will be announced within the next few months.
Restricting all models to approved clients only for MY2024.
Will consider new clients on an exception basis, excluding the Forester.
Ordering is open for Legacy, Outback, Impreza and Crosstrek.
Ascent ordering will open in June.
Forester ordering will open in August – Allocation for Forester is tight again this year.·
Chip shortages are no longer an issue, but there are continued constraints on accessories.
No hybrid models available.
Solterra is an EV vehicle – but not available for fleet ordering.
Legacy, Outback, Forester and Ascent are carryover from MY23.
Crosstrek and Impreza are redesigned for MY24.
Impreza production is moving to Japan, expect an extra month in lead time.·
Pricing and Incentives
Subaru’s expectation is that MY2024 pricing will be up about three percent from intro MY2023 pricing.
They expect incentive dollars to be flat.
OOS will not be eligible for client fleet incentives again this year.
|Nissan MY2024|| Order bank open dates – US|
Will be announced in May/June.
Canada will follow after the US. There will be very limited fleet availability for MY2023.·
Nissan does not expect to have any fleet allocation for Ariya (their EV offering), and you can expect limited allocation for Pathfinder.
There is plenty of MY 2023 Rogue production in specific trims.
Work directly with your Nissan rep to confirm MY24 needs. ·
Pricing and Incentives
MY2024 pricing has not been released.
Nissan Fleet is awaiting final approval of MY24 Fleet Incentive program.
Customer CAP/Incentive Programs will be written first to those customers that are receiving allocation based on their previous history.
Expect incentives to be lower.
Nissan is open to accepting new clients.
Retail Inventory is increasing.
|Hyundai MY2024||Hyundai will provide limited fleet allocation for MY2024.|
It is important to get allocation and production commitment from your Hyundai sales manager.
Limited quantities of hybrids and BEVs.
The allocation for MY2023 Ioniq 5 (a BEV) is sold out.
|Volkswagen MY2024||Pricing is expected to be released mid-June.|
Order Banks are expected to open in summer.
|Volvo MY2024||For MY2024, order banks are not open; pricing is not available.|
We will have more information after we meet with Volvo in May.
|Audi MY2024||We expect the MY2024 to be similar to MY2023 models.|
|Additional News||KIA and Mitsubishi are two OEMs who have expressed interest in working with Fleet on a limited basis.|
|EVs MY2024||We are working with EV OEMs to create either factory order or dealer direct agreements, including: Rivian, Polestar, BrightDrop, Canoo, and Sprinter EV.|
The essential steps to prepare for factory ordering
Being proactive will increase your success in MY2024 ordering. There are steps that you can take to be prepared for ordering when the time comes.
- Reach out to you OEM rep NOW!
- Don’t take your OEM allocation for granted – preference will be given to existing customers.
- Finalize your OEM incentive programs now.
- Collaborate with your Wheels rep to get your OEM info (especially Ford).
- When specs are available, work with your Wheels rep to prepare and place orders.
- Refer to Fleetview/FleetWeb for the lastest updates on MY2024 ordering and production
- ORDER EARLY – order cutoffs will remain volatile.
Vehicles with upfit could experience delays as upfit lead times have increased and production dates and lead times will continue to evolve throughout the year. For out of stock orders, expect high prices, low inventory and longer timeframes. To increase your OOS options, decide on “must have” vs. “can’t have” equipment and colors—don’t expect to purchase vehicles that are a perfect match. Once a vehicle is located for you, approved it quickly. A delay will lose the vehicle.
Unfortunately, vehicle delivery delays continue. This is due to industry logistics that are severely constrained, making it difficult for any OEM or supplier to provide concrete delivery dates.
We Work on Your Behalf
As always, our plan is to be proactive and get you the information that you need. Wheels continues to work on your behalf through engagement with OEMs regarding allocation and production, weekly delayed order reviews, weekly executive leadership meetings, increased staffing to acquire out of stocks, and by rapidly updating our systems with order status. If there is one very vital piece of advice that we can offer, it is to order early—get your orders into the pipeline. Reach out to your OEM rep and don’t take your allocations for granted.