Steering Around Supply Chain Challenges for 2021

Businesses around the globe spent the bulk of 2020 navigating unforeseen threats to their industries, and will need to remain agile as the effects of those disruptions ripple into 2021.

The automotive industry was profoundly impacted by pandemic conditions, particularly the global vehicle supply chain that ground to a virtual standstill for months in 2020. When OEMs finally reopened their production facilities, reestablishing an adequate supply of retail vehicles was top priority.

The consequent limited supply of fleet units, magnified by the volume of fleet operators delaying or entirely skipping the MY2020 cycle, swirled into the perfect storm of unprecedented demand for MY2021 vehicles.

What fleet operators face in 2021

These factory closures, combined with parts delays, material shortages, and delivery challenges, set off a domino effect that is already impacting fleet plans for the MY2021 ordering cycle.

As manufacturers work through the backlog of existing orders and material shortages, build-out deadlines are moving up with minimal notice and orders are shifting to the 2022 cycle. These changes, especially to orders already placed, can wreak havoc on delivery timeframes and fleet budgets.

Additionally, with dealer inventory at near record lows, finding a suitable vehicle in stock at a dealership will certainly be a challenge and if a unit is available, the acquisition cost will likely be significantly higher than normal.

We’re here to help you navigate these uncharted waters. Also, be sure to visit the industry projections section of our website for the latest information from manufacturers across the industry.