Do you remember it? That “oh no” moment (although you may have opted for a different word than “no”) when you realized that COVID-19 was going to cause a serious tsunami for your fleet?
Whether your industry experienced a surge or drop off in demand, you probably spent the last several months treading uncertain water. It seems like the floods are receding now, and as things settle, you’re realizing the currents have been intense and the swells deep.
Need some help resetting your compass?
To find your direction, you can rely on the four cardinal segments of your fleet vehicle lifecycle to point the way: buy, drive, service, and sell. Here are some simple ways to revisit your pandemic fleet practices as the continent slowly reopens, plus some convenient links back to our original articles for each part of the cycle.
BUY – The OEM factory closures threw off your vehicle replacement schedule as well as your budget plans. Depending on your company’s current position, you may have elected to freeze your ordering cycle and move that allocated capital into reserve.
With factories open again, are you ready to order vehicles? If so, leasing is a viable option for reducing your upfront capital expenditure.
To learn more, read COVID Cost Control: How will you navigate the capital expenditure tightrope?
DRIVE – Depending on your business, if demand for your vehicles went up, you should be leaning more on the newer, lower mileage vehicles. They’ll ensure reliability and efficiency at a time when every penny counts.
However, if utilization dropped and you parked some of your older, higher-cost units, now’s the time to figure out if you need to bring them back into active service or remarket them.
To learn more, read COVID Cost Control: Put Your Operating Costs in Park.
SERVICE – If vehicle demand has remained high, sticking to your preventive maintenance schedule is more important than ever. It’s the best way to deter component failures that will prematurely take your vehicles out of service.
But if your analytics showed below-normal utilization, you may have temporarily extended your PM intervals to route money back into your company’s stretched budget. It’s time to evaluate if business is picking back up enough to consider reinstating your regular schedule.
To learn more, read COVID Cost Control: Exploring maintenance and repair strategies during a pandemic.
SELL – Your vehicles are company assets, and you can sell them as part of a short-term strategy to reduce fixed expenses or increase cash flow.
Before selling underutilized assets, remain mindful of any increasing demand for those vehicles as conditions are turning around. You don’t want to be caught shorthanded, especially with factories operating at limited capacity or if your upfitted vehicles require longer build and delivery timeframes.
To learn more, read: COVID Cost Control: Avoid these three mistakes when liquidating assets
Grab an oar and row to shore
As you climb out of your short-term pandemic pace, and into a fleet recovery plan, revisit the conservative solutions you implemented at the onset of COVID-19 for allocating your capital and making the smartest use of your vehicles. Through flexibility and innovative thinking, you can steer your strategy toward calmer seas on the economic horizon.
For fleet and auto industry updates, you can refer to ARI’s COVID-19 SUPPORT resource center.