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GM Issues Fully Subscribed Fleet Memo

Autosphere » Fleet » GM Issues Fully Subscribed Fleet Memo
Chris Hill fleet manager
Chris Hill. Photo Jack Kazmierski

Supply constraints mean orders may be delayed for fleet customers.

To open, I would like to applaud General Motors for rebranding their Buick electric vehicles with the Electra nameplate. This seems so perfect for a line of electric vehicles. And it has a long history.

As a 12-year-old, I remember a couple who came to my grandparents’ house for dinner one evening in a new Buick Electra. I thought it was the most elegant car I had ever seen, with glittering chrome and glass everywhere on its stately black coachwork. My grandfather didn’t go in for cars that were more than basic transportation. A Ford LTD was as far as he would go, although he traded them in regularly every two years. The last car he owned was a Honda Civic.

Difficult times

Speaking of trading vehicles (and specifically, fleet vehicles), in the middle of the most difficult time ever facing fleet managers when it comes to acquiring new assets, GM recently announced that its 2023 model year Chevrolet and GMC Heavy Duty regular and extended cab pickups were fully subscribed for fleet customers. Essentially what this means is that while order banks remain open, GM will not likely be able to allocate enough production units, making it difficult for fleets to order vehicles and manage related expenses cost-effectively.

Although there are likely many factors influencing this decision, it did remind me of my days as a younger fleet manager. There was a meeting I had once with the dealer principal for a Chevrolet franchise in Toronto who bluntly told me that he hated fleet sales—that they were a disservice to his retail clientele and were tolerated only “to move the iron”.

Whether such thinking still exists remains to be seen but the fact is, right now, some fleets are going to be short of some much-needed assets.

Hopefully, this situation can be resolved over the next several months, since fleet vehicles are vital to our economy and keep everything running. No further proof is needed than when a violent thunderstorm hit Southern Ontario and Quebec this past May. At that time, hydro utility fleets were deployed to replace more than 1,900 broken poles and restore power to thousands of customers.

Additional complexity

After two years of extraordinary wait times for new vehicles, the announcement from General Motors adds further complexity to an already difficult situation. One can only hope conditions will improve and that the impact on those dealers who have deliberately built good relations with their fleet customers and earned their business is minimized. There are great people who manage fleet sales at dealerships and also at the OEM level and I’m sure they are all feeling the impact of situations like this.

Back in 1981, when inflation was also high and the economy was in recession, Chrysler was facing the grim reality that its cars were not selling well.  It had a new product line called the K-car that seemed to be a question mark. Then, Xerox Corporation placed an order for 6,000 K-cars for its U.S. fleet, and the road to recovery opened for Chrysler. The Xerox fleet manager, Ron Pink became a bit of a celebrity.  He was certainly not a second-class customer as far as Chrysler was concerned.

They often say that history repeats itself, and by looking at what strategies were employed during previously difficult times (like the early 1980s), we can often be inspired to find effective solutions today. While inventory shortages are likely to persist, it is important that OEMs, who have traditionally serviced fleet businesses, continue to support their customers; by helping to create solutions that benefit themselves, their dealers and their fleet clients.


Chris Hill has been a fleet manager and advisor with some of Canada’s best-known companies, several municipalities and the Ontario government. He has served twice as chair of NAFA Ontario Chapter. Currently he is Program Manager, Fleet Planning at the City of Guelph.

 

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