Another Source Of Stress For Automakers Is Meeting Fleet Demand

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While not all fleet contracts are negotiated in the third quarter, many have traditionally been done at this time of year because it is mutually beneficial for automakers and large fleet operators, Betts said. If you want to buy any used car in Dubai, must visit CarSwitch. 

“People buying fleet cars want to get on the front end of the new model year so they can sell them before they become an old model year, because depreciation is their biggest cost,” he explained. The timing is advantageous to automakers since “January and February are not typically great consumer selling months, so you know you can fill those [fleet] demands in that window of time and keep your factories operating efficiently,” according to Toyota’s Carter.

However, as those contracts come on the market this year, Carter believes the company’s typical strategy of allocating 8 to 10% of its output volume to fleet will be challenged.

Last year, Toyota Carter stated that automakers had discussed the need to meet contractual obligations to fleet customers in the third quarter of 2020 with the dealer group. Toyota’s overall fleet volume was little over 175,000 vehicles in July, increasing about 71% from 2020. According to a Toyota representative, around 28,000 of those sales were to usually more profitable commercial fleets, with the rest going to rental car companies. The Japanese carmaker has the biggest year-over-year increase of any large mass-market automaker.

Read More: Dubai Ambulance Adds New Supercars to Its Fleet

Nissan’s fleet business is up roughly 48 percent this year, while General Motors’ fleet sales are down 6.9%, according to Ford Motor Company. According to industry sources, Co.’s stock is down 10% and Stellantis’ stock is down 18%.

Automakers that can keep factories running, according to Charlie Chesbrough, senior economist at Cox Automotive, are in the best position to profit on the outsized demand from individuals and fleet buyers.

He described the situation as “interesting” and “a huge positive for the producers.” “They can keep their retail channels stocked, and when and if retail demand dwindles, they may shift production to fleet operators at a higher price.”

Fleet Vehicles

A fleet vehicle is a vehicle that a company owns or leases. Fleet vehicles are used by a variety of organizations to supply vehicles to employees such as sales agents and management, as well as to carry goods. Fleet vehicles are frequently used by car rental firms and taxis. A fleet manager may be in charge of the company’s fleet, depending on its size.

Reasons for Purchasing a Fleet Vehicle

The reasons for purchasing a fleet vehicle will differ depending on the type of business you operate. Perhaps you need to make deliveries, travel to see clients on a regular basis, or supply business vehicles to management. Providing employees with a high-end luxury vehicle will help you hire better people. It’s simple to lease a fleet of cars or vans. If you buy or lease more than 10 vehicles, you are considered a commercial fleet, and you may be eligible for numerous manufacturer discounts. If you’re buying a fleet for the first time, always ask your car provider what kind of service they can provide.

Read More: New additions to the Dubai Police Force’s fleet

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