Rising Vehicle Prices ‘Damaging’ Manufacturer-Fleet Relationships

An increasing number of its members are protesting substantial price increases and discount rollbacks on new cars and vans, issues “damaging manufacturer-fleet relationships,” says the Association of Fleet Professionals (AFP), a national group of corporate fleet operators in the UK.

“Some AFP members report experiencing increases affecting more than 80 different models on their choice lists during the last year, in some instances exceeding £10,000,” said. Paul Hollick, AFP chair.

“The subject of very long lead times on new vehicles has been widely discussed in the fleet sector. What has received less attention are the price increases that are also occurring,” Hollick pointed out.

The group understands the many reasons for substantial upwards pressure on prices generally, “but some manufacturers are leaving fleets essentially unsupported, ignoring existing discount agreements and refusing to honor price protection pledges,” said Hollick.

Experienced fleet managers say they’re seeing prices move up quickly, often faster than they can easily track to keep their choice lists current, according to AFP.

“It is creating a situation where, if you manage to get a confirmed order for a vehicle, there is no guarantee you will receive it because a cancellation remains likely and, even if it does arrive after 9-12 months, there is a strong chance that the price will have risen markedly,” said Hollick. “Fleet managers want to continue to nurture sustainable long-term business partnerships but this behavior, by some manufacturers, is undeniably damaging for future relationships.”

Hollick added that the potential administrative burden for fleets should not be underestimated.

“The impact of continually changing prices on choice lists creates an ongoing headache and, of course, brings the strong possibility that an employer will no longer be able to bear the cost of a car that a driver has already chosen and ordered. If an existing vehicle goes up by a few hundred pounds, that will probably be absorbed but we are seeing increases running into thousands of pounds and that potentially creates a much more difficult situation.”

The AFP would like manufacturers to hold pricing for agreed periods of time and, upon order placement, for that price to be honored, said Hollick. “Treating prices as something that be increased substantially without discussion is no way to treat major, long-term vehicle buyers.”