Automotive Fleet

JAN 2014

Magazine for the car and truck fleet and leasing industry

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LETTERS TO THE EDITOR Impact of CAFE on Fleet Resale Values There has been much discussion about the impact of higher CAFE standards on future resale values. The only positive to used values is that new prices will be going up, which helps used-vehicle dollar prices, if not residual percentage. Also, the existing feet will beneft in that it will have market class composition and powertrain selection that may be more in tune with consumer demand. Tom Webb Chief Economist Manheim Consulting Marshall, Va. I agree, there will be (or at least there was in the past) a lockstep escalation of resale prices as new-vehicle prices increase. There is no reason to think this won't occur again. Also, there has been an overall downsizing trend among corporate feets over the past decade. First, there was the migration to four-cylinder engines, which started in earnest in 2006. Today, many feets have gone through three to four ordering cycles spec'ing four-cylinder engines and are now 100 percent four-cylinder. FMCs are reporting that the majority of their new-car orders are spec'ed with four-cylinder engines. Second, there has been a movement to "smaller" vehicles by corporate feets, which is driven by the availability of models in OEMs' portfolios, in addition to fuel-reduction initiatives. Nowadays, the "intermediate-sized" cars in commercial feets are the Fusion and Malibu. In the 1990s, these models would have been considered compacts. — Editor PHOTO: WHITEHOUSE.GOV 6 AUTOMOTIVE FLEET I JANUARY 2014 Picking My Battles Young MBAs are entering into the work world without practical "hands-on" experience, yet they plan to manage commercial feets without the appropriate knowledge and experience. I just keep my head down, continue to plug away, and pick my battles. My job has changed since I had my frst feet management job. I'm now being asked to do things that are unrelated to my job expectations, education, and experience. In my opinion, it is a very diffcult time to be a so-called "expert" in the feet management world. In just a few years, we have transitioned from doing the right thing for our organizations to dodging bullets. Have you ever heard of a general being a foot soldier? I feel like a report pusher and because of budgetary restraints, our senior leadership team does not see the value in having me or others like me visit feld locations to work with drivers and their management team. I love technology, but there is a point in time where a good, old-fashioned face-to-face meeting cannot be replaced. Author Wished to be Anonymous not appropriate for a full-size or executive vehicles. There is the traditional "don't order black in Florida" example that has been around for years. So, it's important to recommend specifc color codes on each model and possibly vary the recommendations based on regions. Ultimately, it's all about the resale with the OEMs and paint companies selling color choices that are hot today and then the feet management companies recommending a subset of those colors that we believe will still be good sellers in the resale market two to fve years from now. Bob Graham VP Vehicle Remarketing , ARI Mount Laurel, N.J. Impact of Technology The pharmaceutical industry is changing. In the future, we may use technology more for distance learning with doctors, which means reps will be driving fewer miles, thereby reducing our costs. Author Wished to be Anonymous Impact of Color on Resale Texting & DUI are the Same Basically, color choices are driven by fashion, the media, and, ultimately, the consumer who is infuenced by the frst two. That's where suppliers, such as DuPont, get their feedback to create the color choices for new vehicles. As an industry, over time, we track those colors that have staying power and are popular over a number of years. Those colors become the "recommended" palate of color choices to our clients since the popular colors will bring more resale than the unpopular, fad, or outdated colors. Typically, feets still allow the drivers to choose their own colors, but the driver's choices are limited to the recommended colors. Color choices also get down to the vehicle specifc, region specifc, and color "code" specifc levels. Many models have more than one red or silver color available and it is not enough to just recommend "red" since one of the "reds" may be an unpopular color and considered less desirable than the other red. Certain colors may be good for small or mid-size vehicles and The courts should treat texting the same way, legally, as they do drunk driving. This would solve the problem. Period! Submitted via e-mail by Chris Sharing of Best Practices As a feet manager who has been in both service and non-service sales feets, I'm surprised that more best practices aren't shared between the two. I've had the opportunity to meet many feet managers, and when we approach topics such as TCO, recruitment and retention, or even driver risk management, I'm surprised at some of the responses that immediately dismiss their value in service feets. Although these topics are "generally" considered outside of the box in most service feets, there are strategic opportunities for the organizations that we support if we as feet managers can at least consider them when putting these tools/vehicles on the ground. For example: In our business, it can be

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