The Climate Group has more than doubled the number of EV100 members in the last year, and approximately 42,000 electric vehicles have been deployed across members corporate fleets, despite a lack of EV supply to meet demand.
This deployment of EVs for corporate fleets has pushed up members’ average progress by more than half compared to last year, from 8% to 13%, according to The Climate Group. The 23 members that also reported last year have on average already achieved 17% of their 2030 fleet targets.
Despite the growth for the EV100, the No. 1 barrier of progress that companies involved in the group face is a lack of EV supply to meet demand.
“As more businesses join EV100 and strengthen the corporate demand signal, automakers have a choice: get ahead of the curve and seize the market opportunities, or lag behind and get hit by harsher regulations,” said Helen Clarkson, CEO, The Climate Group.
The leading driver for companies committed to the EV100 is the desire to lead on addressing the climate crisis.
In the last year, The Climate Group has more than doubled the number of EV100 members from 31 to 67 at the time of writing, and the total number of company owned/leased vehicles that are projected to switch to EVS increased from 210,00 to 340,000.
Other key progress findings include observations that 1,100 sites have charging stations installed, which is up 50% from last year, and approximately 600,000 employees have access to a charging station, which is up 80% from last year.
Additionally, fleet management company LeasePlan reported in November 2019 that it has electrified 2.1% of its 1.9 million customer fleet – approximately 40,000 vehicles – with EVs accounting for 5.7% of new orders.
Online remarketing has been a growing trend for the past few years and it promises to continue. As more remarketers are selling and buying wholesale vehicles online, some new trends have emerged.
For the past several years online sales have accounted for an increasingly larger share of overall sales at auctions.
More recently, improvements to online vehicle representation through things such as better vehicle imaging and more in-depth condition reports have helped drive growth in online sales.
The continued development of new online tools, platforms, and apps have also made the buying and selling experience more convenient. Apart from convenience, buyers and sellers are finding efficiencies and costs savings by moving more of their remarketing efforts online.
Automotive Fleet recently spoke to representatives of two of the largest players in the wholesale space KAR Global and Manheim to talk about some of these trends, along with others that they have seen in the online remarketing space.
“You’re starting to see sellers be more motivated to sell cars as quickly as possible. They’re looking for velocity and if you think about velocity, the best way to increase that velocity is most likely to sell cars online,” said Jason Ferreri, executive vice president of online services for ADESA.
Both KAR and Manheim have seen year-over-year growth in online sales over the past several years.
As of the third quarter of 2019, the latest available quarter for financial data, online sales accounted for 59% of all transactions for the KAR Global family of companies, up from 38% in 2014. OPENLANE has driven much of that growth for KAR.
In 2019, 48% of sales at Manheim were digital, up from 44% in 2018 and 40% in 2017. In December 2019 52% of all sales originated from a digital channel and through early January over 50% of sales were digital.
Low-priced cars selling better online
Both Zach Hallowell, VP Manheim Digital and Ferreri indicated that lower-priced vehicles have benefited from improvements in the online wholesale space.
“All the efforts in improving vehicle representation and instilling more confidence in the buyers has led to KAR seeing the average price point of vehicles selling online move down,” said Ferreri. “This means that people are becoming more and more comfortable buying a lower-dollar vehicle. That’s been great, it shows that it’s not just the $15,000 to $20,000 car that sells online. We can sell a $6,000 car online all day long.”
Manheim saw this same trend in 2019 when Manheim Tucson became its first auction to go all digital.
“Manheim Tucson opened our eyes to the possibilities of cars that you wouldn’t naturally think would sell digitally, can sell digitally,” said Hallowell. “Most of the cars sold at Manheim Tucson are valued at less than $5,000 and are sold as-is, and we’ve been able to sell that digitally.”
Several factors such as safety and buyer feedback led to Tucson’s shift to all-digital and so far, the auction’s performance has been encouraging, noted Hallowell.
The company saw no drop in performance, and in fact, saw a slight up-tick in the values the auction generated.
With the success of its Tucson location, Manheim is now evaluating other locations that it can move toward all-digital.
“Arbitration rates haven’t gotten any higher either,” said Hallowell. “I think that’s attributable to the great work that we do around imaging cars, writing condition reports, standing behind our cars. We’ve been able to give buyers confidence that they can continue to buy cars in a slightly different format but with the same confidence that’s been at Manheim.
Ferreri noted that KAR has always been able to sell higher-priced off-lease vehicles online, but now that vehicles are being represented better online, and buyers are feeling more confident that the vehicle they see onscreen will match their expectations, it’s opening the door to all sorts of vehicles selling better online.
“Everyone can play in the sandbox, so to speak. It isn’t just the off-lease car. Repossessions, fleet cars, dealer cars, it doesn’t really matter what the source of the vehicle was. If represented properly and we instill confidence, we feel any car is eligible to be sold online,” added Ferreri.
At this point, KAR has about a dozen customers — from the commercial, fleet, and dealer segments — that don’t run any cars across the block anymore. They are exclusively using VirtuaLane to sell their cars, noted Ferreri.
On the buyer side, Ferreri noted that many buyers have stopped physically inspecting vehicles. They rely on the data and imaging that’s available digitally.
“It’s funny, we don’t see many folks walk the lot, even the buyers who show up to the physical auction on sale day and participate in the VirtuaLane sale,” said Ferreri. “The report we get from a lot of our auctions is that a lot of those buyers who used to still go out the morning of or the day before to walk those cars, there’s less and less of that occurring. They’re relying more and more on what they see on the TV monitors and what they see on the assets in their hand.”
Making the online experience more personal
The sentiment that Hallowell and Ferreri shared when it comes to the online remarketing is that personalization needs to become a bigger part of the experience.
Amazon and the personalized recommendations that it offers was the example that they gave to explain what their respective companies are hoping to do.
Similar to how Amazon recommends products based on your search history and on the products you purchase, both Manheim and KAR are aiming to offer a similar AI-powered recommendation feature to their online platforms.
Manheim recently redesigned its main website, Manheim.com, to offer this sort of personalization.
When users login to the site, it will now remember previous purchases, searches, and other data points. Then, based on those data points, it’ll feed the user a set of recommended vehicles.
“Purchase history has the most direct expression of interest in the vehicle. If you bought the car and we see a pattern in your buying then our recommendations will lean more heavily toward that,” said Hallowell.
One example given was that if a user happens to buy a lot of domestic trucks, the system will recommend domestic trucks because it has identified a pattern in which those types of vehicles perform well for the user.
If the user doesn’t have a long purchase history with Manheim then the system will lean toward the user’s searches. The system will learn from the user on a day-to-day basis based on the vehicles the user searches for. Essentially, every time the user interacts with the site, it’ll be learning and dynamically respond, noted Hallowell.
But it isn’t just about the buyer, added Hallowell, Manheim has also put plenty of thought into improving the seller experience because in order to grow online sales, all channels need to be addressed. One of those improvements is bulk management for sellers, which allows simpler management of large number of vehicles.
ADESA also added a personalization feature to its website and mobile app at the end of 2019 that is based on similar data points such as purchase history and things that are happening in the retail market.
“It’ll get smarter as it’s used,” said Ferreri. “The more you click on a vehicle that we’re serving up to you, we go OK, great, we were doing the right thing. If you’re not clicking on them, our algorithm needs to get better. It needs to get smarter. It means we’re not serving up the right vehicle to you yet.”
Overall, the goal of these personalized recommendations is to increase the likelihood that a user will purchase a vehicle online. The thought process is that if the platform learns enough about a user that it’s able to feed the user exactly the vehicles the user is interested in buying, it’ll increase the rate at which the user buys vehicles online.
What about physical auctions?
When it comes to the place that physical auctions will occupy as digital sales continue to account for a larger share of overall auction sales, the answer appears to be that it will occupy whatever space buyers determine that it should.
Both Hallowell and Ferreri said that their companies aren’t looking to upend physical sales or have goals to reach a certain percentage of digital versus physical sales. The shared sentiment was that if consignors, buyers, and sellers determine that a certain avenue is where they want to go, then they’ll make sure to cater to that choice; whether it means that physical auctions play a smaller role, bigger role, or completely different role.
“We want to have all channels available to both buyers and sellers and let them decide what makes the most sense for them,” said Ferreri. “We don’t have specific stated goals for volumes or percentages. There’s certainly a commitment here at KAR to physical auctions and physical locations. Will auctions potentially look and feel different over the next five to 10 years? I think they will.”
Even if sales continue to move away from physical auctions, Ferreri noted, physical auctions will always offer a location for vehicle storage and reconditioning centers.
“For us it’s not about digital or physical, we’re not saying that there’s only one way to do this,” said Hallowell. “We have the scale to support our sellers that need storage space and security or need a place to hold their repossessed vehicles until the notice of intent to sell has expired. The sellers that need reconditioning, inspection, detailing, and so on.”
Looking ahead, the rate of online sales growth looks like it’s accelerating. Digital channels have become a bigger part of overall business, even outside of remarketing, so it’s only logical that it’ll continue to bleed into the remarketing space.
“When you think of data available from a vehicle, there are vehicles that are starting to update service history and diagnostics over the air, said Hallowell. “We can know how the car was built and get that data via data integration. It’ll be up to us as remarketers to make all that information easily and efficiently accessible.”
The inaugural AFLA Canada Fleet Summit has sold out for a third time, continuing to exceed its original expected capacity, and is being held Hilton Toronto Airport in Mississauga, Ontario, on Feb. 12 – 13, 2020.
Initially budgeted for 50 attendees, registration quickly exceeded 100. AFLA renegotiated with the hotel to accommodate the space to a total 150 attendees, which was exceeded one week later. This was renegotiated again to 200 attendees which was exceeded several days before the start of the conference
The event has become standing room only with more than 200 attendees at the Summit.
The Summit began with an inaugural fleet manager only meeting to create a peer-to-peer sharing of fleet data benchmarking. The opening keynote presentation on the state of the Canadian fleet market was given by Keith McLaughlin, publisher of Canadian Automotive Fleet magazine.
The AFLA Canada Fleet Summit is designed to promote fleet management education for Canadian-based commercial fleet managers working for small and mid-size businesses, and to help multinational fleets operating in Canada to better understand the Canadian fleet market to optimize their fleet operations. The full conference agenda is also available online and includes multiple deep-dive sessions addressing topics pertinent to those who have fleet responsibilities in Canada.
The Women in Fleet Management (WIFM) association will also co-locate its next meeting at the AFLA Canada 2020 Fleet Summit on the Wednesday, Feb. 12, the first day of the Summit. This will also be WIFM’s first event in Canada.
The AFLA Canada conference will be held just before the start of the 2020 Canadian International Autoshow, which opens Feb. 14 in Toronto, for those interested in staying beyond the conference.
Drivers failing to maintain their lane were responsible for 55% of fatalities on Georgia roads in 2018 and experts believe distracted driving is the culprit, reports The Summerville News.
To keep motorists focused on the road, the state is taking several steps.
On many of the state roads managed by the Georgia Department of Transportation District Six rumble strips are being installed, notes the report. The strips are installed on both the center and shoulder lines to alert drivers and keep them from leaving their lane. It’s all in an attempt to combat distracted driving, prevent crashes and save lives.
In addition, lawmakers are considering stiffer penalties for distracted driving.
Georgia implemented a hands-free law in 2018, which bans drivers from handling their phones or other electronic devices while behind the wheel. However, motorists continue to violate it.
House Bill 113 aims to up the fines, reports the Atlanta Journal Constitution. Currently, the fine for a fist-time offense is $50. If the new measure is enacted a first offense could cost as much as $100. Fines for a second offense would range from $100 to $200, and third offenses would cost $150 to $300.
More than 1,500 people lost their lives on Georgia roadways in 2017 alone. That tally is approximately one-third more than in 2014.
The human cost of China’s coronavirus outbreak is tragic, mounting and already readily apparent. The cost to businesses around the world could also become severe in the coming weeks.
Manufacturers around the world have come to depend on parts from China to keep their own supply chains going. Experts fear that factories across the globe could ground to a halt if many of the plants across China remain closed this coming week.
Auto plants could be among the first to feel the impact. That’s because of the massive size of the Chinese auto parts industry and the fact that you can’t build a car with only 99% of its parts. “It only takes one missing part to stop a line,” said Mike Dunne, a consultant to the auto industry in Asia and the former head of GM’s operations in Indonesia.
He said there have been many examples in the past where problems like a fire or natural disaster shutting a single supplier plant can affect auto plants around the world. This could be far worse depending on how widespread the shutdown of plants due to the virus becomes.
China is a major supplier of parts to auto plants around the world — shipping nearly $35 billion of parts in 2018, according to UN data. About $20 billion of Chinese parts were exported to the United States alone in 2018, according to the Commerce Department’s International Trade Administration. While some of those parts go to auto parts retail stores, a large percentage of them go to assembly lines and are to used to build cars.
And experts say the parts at risk are likely greater than that, since many Chinese parts, from computer chips down to screws and bolts, are not classified simply as auto parts the way a bumper or engine piston is classified that way. Also Chinese parts often end up being used in auto parts that are built in other countries.
Finding replacements for all those parts is not practical if the supply continues to be disrupted, said Kristin Dziczek, vice president of the Center for Automotive Research, a Michigan think tank.
“It’s difficult to say when it will start to bite here,” she said. “I would expect to see a cascading global impact by the end of February if Chinese production doesn’t come back [this week]. All automakers have a supply chain war room going on right now to determine what they can be doing. But China is so huge, there is no way they cannot be impacted.”
So far most of the auto assembly plants in China are closed, and they’re there to serve the Chinese market. Volkswagen announced it was keeping its Chinese auto plants shut partly due to travel restrictions there and partly due to the lack of parts. General Motors said it won’t restart its Chinese plants until Feb. 15, partly due to problems with “supply chain readiness.”
But it has already started to spread to plants elsewhere. Hyundai has shut its assembly plants in South Korea, not because the disease itself has spread there but because it can’t keep the plants operating without Chinese parts. Nissan said that its plant in Kyushu, Japan would have “production adjustments” due to a shortage of Chinese parts. French automaker Renault told Reuters that it also was suspending production at a plant in Busan, South Korea, due to disruptions in supplies of Chinese parts. Last week, Fiat Chrysler said it has one European plant at risk from the lack of Chinese parts in the next two to four weeks.
All the other automakers will say they are closely monitoring the situation in China but that it’s too soon to say what the impact on their global operations will be.
“It’s a very fluid situation,” said GM CEO Mary Barra last week when speaking to investors.
Experts say the global auto industry hasn’t seen the full impact before now because the plants had been scheduled to closed for the lunar new year. So many assembly plants had an extra inventory of parts going into the holiday. While the shutdown was extended by a week due to the outbreak, most plants haven’t run out of Chinese parts yet. But that can’t last.
The prospect of widespread halts at global auto plants becomes a lot more likely if the plant shutdowns continue, said Simon MacAdam global economist at Capital Economics in London.
“At the moment it’s rather difficult to tell,” he said. “A supply chain is only as strong as the weakest link. That’s why there’s such uncertainty about estimates.”
Even if the plants try to reopen, it’s not clear if they’ll be able to operate as normal due to potential labor shortages, or in the worst case scenario, a further spreading of the disease, said Dunne. And getting the parts shipped won’t be business as usual.
“They’re supposed to start getting back to work Monday,” said Dunne. “But even then, it will be a start-stop. Some cities will have road blocks, some won’t have flights. We’re going to be in for an interesting time starting this week.”