In the News

2020 Supply Chain Constraints Carryover into 2021 Model-Year Ordering

A number of supply chain constraints affected model-year ordering in 2020 due to the effects of COVID and the subsequent lockdowns.

These constraints in 2020 triggered a domino effect for the new model-year bid process, alongside a period of widespread budget constraints.

This is in addition to longer lead times, tight product availability and early order build-out schedules from multiple OEMs. These challenges have left some fleet managers fearing that they may have difficulty replacing or adding vehicles early in 2021, especially as demand rebounds and the ordering window compressed for 2021 models.

• Many vehicle companies announced the end or pausing of production for various models which heavily influences the market

• Long lead times continue to persist, with some double what they were before March 2020

• Limited inventory is leaving fleet managers reluctant to sell fleets, and would rather sell to high margin buyers

• The average OTD is now 10 to 12 months, compared to 4 to 8 months in 2019; For example, if a 2021-model truck was ordered today, it would arrive after the arrival of 2022 models

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Disclaimer: In the News blog posts are Doering's take on the best content and the latest news in the Fleet Management Industry. Doering did not write the original source article.