Automotive Fleet

OCT 2013

Magazine for the car and truck fleet and leasing industry

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ORDER-TO-DELIVERY 2013 ORDER-TO-DELIVERY TIMES: VANS VAN MODELS Crew Cabs, and the Ford Fusion," said Gomez of Donlen. "Although the overall OTD for the 2013 Ford Fusion refects a slight improvement, there were several challenges we faced for this model as well. In the beginning of the model-year, there was a material hold that impacted the OTD time. To further complicate the issue, as vehicles were repaired, there was a backlog in shipping these vehicles from the plants which resulted in units being delayed for several weeks and, in some instances, months." Another issue that compounded quality hold delays were component shortages. "Tere were parts shortages, as related to the quality inspections for new model launches," said Vliek of Emkay. One area of frustration has been difculties in getting detailed information on the duration of vehicle holds and when vehicles will be released. "Because information related to quality holds is ofen closely guarded by the manufacturer, it may be difcult for factory contacts to relay the exact reasons why a vehicle is being held, or when it is projected to ship. While some manufacturers say the assembly plants prioritize feet-sold orders so they can be moved through the inspection process quickly, we see little evidence of that actually happening," Freund said. When tabulating all of the factors that contributed to 2013 OTD delays, quality holds were the No. 1 issue contributing to delivery delays. Agreeing with this assessment is GE Capital Fleet Services. "Product and quality issues was the No. 1 infuence afecting the overall performance for order-to-delivery in 2013-MY for GE Capital Fleet Services," said Groth. Fastest OTD – vans 54 DAYS 20 AUTOMOTIVE FLEET I OCTOBER 2013 2013 Dodge Grand Caravan 2013 Chrysler Town & Country 2013 Ram CV 2013 Toyota Sienna 2013 Chevrolet Express (combined) 2013 GMC Savana (combined) 2013 Ford Econoline 2013 Mercedes-Benz Sprinter 2013 Ford Transit Connect 2013 Nissan NV (combined) During the 2013-MY, certain models were more prone to quality holds than others. "As with every model-year, we experienced a few signifcant quality holds. Te largest impact came from the newly redesigned Ford Fusion. With the Fusion being one the most popular feet vehicles, customers experienced delays that lasted several months, and, in some cases, required alternative options to fulfll the request," said Kokos of PHH Arval. A related issue delaying OTD were recalls on certain feet vehicles. "In the beginning of the model-year, we experienced multiple recalls on the 2013 Ford Escape. Te recalls impacting the Escape resulted in all new orders being put on hold for several weeks until the impacted units still at the plant were repaired," said Gomez. Tis year, there were signifcant quality hold issues with the new Fusion being built at Ford's Hermosillo plant in Mexico. "It is standard operating procedure for all manufacturers to have containment holds for quality inspections prior to giving the approval to release new vehicles for shipment. Te Fusion quality issues at the Hermosillo, Mexico, plant were particularly problematic. Multiple quality issues required every Fusion produced to be inspected and many thousand had to be parked at the plant for further quality inspections and repairs that were further delayed by parts supplier issues," said Jim Tangney, VP of vehicle acquisitions for Emkay. "It turned out that some of the frst vehicles built were ofen the last to be inspected, repaired, and released from the plant, and some of these vehicles experienced a six- to eightmonth lead-time. Clients TANGNEY 2013-MY OTD (DAYS) 54 54 57 69 73 74 100 109 141 141 2012-MY OTD (DAYS) 62 50 N/A 79 74 85 85 128 144 128 CHANGE (DAYS) -8 4 N/A -10 -1 -12 15 -19 -3 13 were very frustrated with limited status updates to provide them, as were we. Later in the model-year, as some of the older orders were still not shipped, Ford had to advise us to re-order the vehicles or purchase one from dealer inventory." Some FMCs believe OEMs need to develop a better balance when addressing quality issues, so as not to adversely impact OTD. "I understand vehicle quality is the No. 1 priority, but on-time delivery is also important. Customers expect quality-built vehicles and on time delivery, and generally are not terribly patient when one element is sacrifced for the sake of the other," said Freund of Wheels. One approach adopted by several OEMs to improve OTD is to embed their personnel with suppliers in an attempt to minimize supplier constraints issues. "Several automakers are now working more closely with suppliers (in some cases, going so far as to embed employees at the supplier facilities) to improve communication, maximize production, and ensure quality-made parts in an efort to avoid failures and bottlenecks during vehicle assembly," said Freund. Nonetheless, quality holds for some popular commercial feet models were especially lengthy. "Some customers incurred added costs due to missed residual timing, repair costs to older vehicles still in use, and rental expenses," Freund continued. Weather-Related Delays Tere were several weather-related delays, including snowstorms, hail, heavy rains, and fooding, but, with the exception of Superstorm Sandy, most had minimal impact to 2013 feet deliveries, according to Freund of Wheels.

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