Mid-2021 State of the North American market with Donlen and ARI
Six months into 2021, we asked representatives of ARI and Donlen how the fleet market in North America is recovering after the COVID year of 2020. Both agree the market is returning to levels we could only imagine a year ago.
For Donlen, 2021 was also the year in which the company changed ownership. “The new dynamic is palpable throughout our organisation,” said Tom Callahan (pictured right), CEO, Donlen. “We feel extremely excited and fortunate about the change of ownership. Thanks to Apollo’s commitment to invest, we’re already growing our teams by hiring dozens of new employees from inside and outside the industry. Additional investments in telematics as well as our technology stack are already in play. Donlen is now in a formidable position with a capital advantage and a well-funded strategic plan.”
Stay up to date about fleet management in North America! You can rewatch the sessions dedicated to North America at the 2021 Global Fleet Conference.
1. How do you look back on the first 6 months of 2021?
ARI spokesperson: “The North American fleet market has remained extremely strong since the beginning of 2021, even with the challenges of 2020 and the disruptions in the supply chain market. Business demand has returned in ways we could only imagine a year ago. Vehicle availability remains the biggest disruption in our market, as delivery challenges and parts and material shortages continue to impact the new vehicle market. But we’ve found that our customers are back to work in high volumes and are maintaining steady, strong vehicle numbers and operational growth.”
Tom Callahan, CEO, Donlen: “Overall Donlen volumes are operating at 90-95% of pre-pandemic activity. Customers have shifted and adapted to post pandemic business models with industries like healthcare & pharma and construction seeing significant increases (+20%) in volume while others like insurance are still down over 40%. New vehicles have slowed significantly with chip shortages and the corresponding re-sale market has strengthened with some models appreciating as much as 50% year over year for the same aged vehicle. Customers have taken a more aggressive approach in terms of placing orders earlier to ensure vehicles will be available when they can get them.”
2. How different was recovery in Canada from the US?
ARI: “The striking difference in Canadian and US market evolution for 2021 to-date is really the speed in which COVID restrictions were lifted, and the effect this had on the volume changes. In Canada, with lockdown in effect until just recently, only the essential service organisations were operating at full speed, where sales fleets were mainly parked, with a high level of work from home. Beyond the pace of return-to-normal volumes, the fleet make-up and operations remain fairly consistent across the border.”
Tom Callahan, Donlen: “Canada is recovering at a much slower rate due to the extended lockdowns that most provinces experienced during the first 6 months of this year. Kilometres and volume are only back up to 60-70% of pre pandemic levels. However, with the vaccination percentages on a continuous rise across Canada, provinces are re-opening in stages and we have noticed the market picking up in June and July.”
3. What is your outlook for the rest of the year?
ARI: “We believe significant growth opportunities exist within the large vocational fleet segment of the industry and our profound understanding of these various verticals, along with our ability to support fleet operators in this sector, will continue to fuel our organisation’s success today and for years to come.
"Emerging technology remains top-of-mind for most fleet stakeholders. This is an area where we’re collaborating closely with our customers; helping them better understand the “why” behind their fleet challenges in order to develop a better “how” to overcome those obstacles and propel their business forward.”
Tom Callahan, Donlen: “Companies are navigating through the impact of chip shortages, fuel shortages and a crazy resale market. We also see that fleets are leasing more as a way to preserve cash. There will be a focus on self-service technology and analytics such as fleet dashboards that allow quick views of key actionable metrics. Increased investment in safety will pay off in the long run with a reduction in accidents and accident severity. The rEVolution will speed up soon with new product offerings; 2022 will be a breakout year for battery electric vehicles (BEVs).”
4. What long-term effects of the pandemic will stay in North America?
ARI: “As of now, it’s too soon to realistically tell what pandemic habits will stay and what will go. Looking at the behaviours from the last six months, we can anticipate conversations around what the return to “normal” will look like for the long-term future, as work-from-home decisions could change the way customers approach fleet strategies in the next few years.”
“The supply chain disruptions in the market, and the speed that the microchip shortage resolves itself, will be the real pandemic consequence that needs to be studied and monitored in the world of mobility. This is going to be where fleet data and telematics equipment come into play. Studying data from past fleet behaviours, alongside habits that developed during the pandemic, will make it so that we don’t have to guess at the future.”
Tom Callahan, Donlen: “Everyone learned that a lot of things can be accomplished in the work from home model. We do not expect volumes to fully return to pre-pandemic levels and the fact we are only 5-10% lower seems quite positive. We anticipate as things slowly ramp back to normal and vehicles become more readily available, we will see the resale market gradually return to pre-pandemic conditions.”
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