7 Jun 23

Fleet – OEM Relationships at “all-time-low”? The Fleet Community responds

In a reaction to the Fleet Managers’ and Fleet Associations’ growing concerns on the collaboration with OEMs, Fleet Europe has conducted an anonymous survey among fleet managers. We sought to understand their experiences and opinions, as well as recommendations and best practices to overcome the challenges that corporate fleets are dealing with.

The survey, triggered by a press release by the AFP (Association of Fleet Professionals) delved into various aspects, including challenges faced, interactions with OEMs and leasing companies, and potential solutions. In this article, we present the key findings and insights gathered from the survey responses.

The Association of Fleet Professionals came forward with compelling arguments. Some examples:

“Placing orders is difficult because you can’t get hold of the right people to do so, getting subsequent updates on those orders is often impossible and finally, these orders are often pulled at the last minute with no explanation”

“It’s a common complaint that before the pandemic, fleet managers were pursued by manufacturer reps on a daily basis and now, they haven’t heard from any in years”

Questions and Answers

Q1: Do you agree with the statements that are made by the fleet associations?

The survey revealed a consensus among fleet managers regarding the challenges highlighted by fleet associations. Many respondents expressed frustrations with order cancellations, delays, and fluctuating prices, which persisted from 2021 to 2023. However, the extent of these issues varied based on the market in which the orders were placed. While some fleet managers reported minimal problems in major fleet markets, others highlighted significant issues in specific countries.

Q2: Have you identified issues, other than the order challenges, lack of updates, cancellations of orders and difficulties to get hold of OEM representatives?

A notable concern expressed by fleet managers was the substantial price or discount changes made by OEMs between the ordering and delivery of vehicles. This lack of transparency and the inability to cancel orders without penalty created difficulties for employees whose budgets or own contributions were affected. The unpredictability of prices and discounts made budgeting a daunting task for fleet managers, who called for more stability in pricing and a fixed price guarantee for ordered vehicles.

Participants also mentioned that it has become increasingly difficult to get in touch with OEM representatives; one participant shares that “…in a recent tender we were surprised to be told by some established fleet partners that they were unable to respond due to lack of resources.”

Q3: Have you already taken the initiative yourself to reach out to your preferred OEMs and ask for explanations / commitment? If so, what was the reaction?

Some respondents reported having several meetings with OEMs, resulting in small bonuses as compensation for issues encountered. However, they also noticed a trend of OEMs amending contracts to include terms and conditions that allow for price changes or order cancellations under "force majeure" circumstances.

Other respondent mentioned receiving no reaction from their biggest OEM but managed to find a new OEM that was more responsive and willing to work with them.

Most respondents highlighted the challenges of communication and lack of information within the OEMs' organizations. Some also mentioned the standardised responses received when sharing their concerns with the OEMs’ account managers, leaving an impression that the AMs are not sufficiently armed to deal with the situation.

Q4: How does this OEM behavior affect your fleet (recalculations, employee dissatisfaction, car policy reviews, works council engagements…)?

Based on the provided answers, it is evident that OEM behavior has various impacts on fleet management, employee satisfaction, car policy reviews, and works council engagements.

The responses highlight the following key points:

  1. Recalculations and extensions have become a regular part of fleet management to cope with the challenges posed by OEM behavior.
  2. Policy adjustments need be made based on the quality of service received and acceptable pricing from OEMs.
  3. Differentiating between OEMs is important as unreliable OEMs are not considered suitable partners.
  4. Difficulties in building a car list and explaining long lead times to drivers lead to modifications in contract terms, such as increased maximum duration and kilometers. This, in turn, impacts the total cost of ownership (TCO) and necessitates the use of medium-term rentals.
  5. Selecting alternative OEMs can be challenging for work councils and drivers, who may struggle to accept the changes.
  6. Increased TCO affects the brands, models, and drivetrains employees can choose, limiting options that fit within their budget.
  7. OEM behavior increases the workload for fleet managers in terms of managing stakeholder expectations, identifying alternative supply channels, and mitigating cost impacts.
  8. Depending on the extent of the OEM's behavior, discontinuing work with that OEM or discussing alternatives with drivers may be considered. Extreme delivery times may lead to order cancellations.
  9. Dissatisfaction among drivers arises from extended use of old cars, while fleet managers face increased administrative work and higher maintenance costs. Additionally, more expensive short-term rentals (STRs) may be necessary.

These responses demonstrate that OEM behavior has significant repercussions on fleet operations, policy decisions, employee satisfaction, and administrative burdens. It impacts budgeting, vehicle availability, stakeholder management, and the overall efficiency of fleet management processes.

Q5: How are your leasing companies supporting? Are they helping you to find cars, are they proactively proposing alternatives? Are you being updated regularly by your account managers?

The assessment of leasing companies' behavior varies among the respondents. Some participants express positive views, noting that leasing companies provide good support and visibility, offering assistance where possible. These leasing companies are seen as motivated to help during challenging times. However, there may be a focus on promoting their own subscription or used-car models, which may not align with the respondent's global fleet strategy. Additionally, difficulties in response capacity from rental companies are mentioned.

On the other hand, there are respondents who feel that lease providers are not proactively supporting or proposing alternatives. They perceive lease providers as being reactive in the current situation, reflecting the behavior of OEMs. There is a belief that lease providers should take a stronger position towards OEMs to protect and unburden their customers, rather than passing on communication and risks directly. These respondents suggest that if a suitable car cannot be found, leasing companies may not be highly concerned.

Most respondents appreciate the efforts made by leasing companies to support and find solutions, providing valuable insights. They have built strategic relationships with leading leasing companies, indicating a level of satisfaction with their support.

Overall, the responses reflect a mixed assessment of leasing companies' behavior. While some respondents feel supported and updated by leasing companies, others express concerns about the level of proactive support, focus on their own models, and limited assistance in finding suitable vehicles. The experiences shared highlight the importance of effective communication, proactive engagement, and alignment with fleet strategies for a successful partnership with leasing companies.

Call to Action

The Fleet Manager community is keen to continue engaging with their preferred suppliers but is also looking for a direct dialogue; OEMs are therefore invited to provide feedback, context and additional insights by connecting with Steven Schoefs (sschoefs@nexuscommunication.be).

We invite you to watch this space for the reaction of the OEMs.


Authored by: Yves Helven