United States

Last modification: 20 Feb 18
Introduction: 

The United States are one of the most nature fleet management market. This fleet market currently operates in a low-interest and low-inflation environment. Meeting the U.S. government's safety and fuel economy standards will require substantial investment by OEMs. Those higher costs wil be passed on to end users, which will stimulate costsavings innovations and funding alternatives. And secondly, technolgy will transform fleet management. The trend towards integrating business processes will accelerate. 

Cost containment remains the #1 priority for fleet managers everywhere. The most common strategy is to extend the vehicle replacement cycle. Downsizing will remain a fleet trend in the US, in class size, engine displacement and fleet size. Current low fuel prices are expected to return to valatility, and governments are under pressure to increase fuel taxes.

 

Chapter 1: Economic and business environment

Demographics

321 million population

Capital

Washington

Major cities

http://www.citymayors.com/gratis/uscities_100.html

Languages

1st English - 229 million 2nd Spanish - 35 million 3rd Chinese - 2.6 million 4th Tagalog - 1.5 million 5th French - 1.3 million 6th Vietnamese - 1.3 million ...

GDP

$54,600 per capita

Unemployment rate

4,1 percent

Main industries

Energy, manufacturing, transportation, health care, agriculture

Currency

dollar

Interest rate

1.25-1.5 percent

Fleet Maturity Index (scaling)

xxx

Political key info

The United States is a federal republic in which the president, Congress, and federal courts share powers reserved to the national government according to its Constitution. 

The executive branch is headed by the President and is formally independent of both the legislature and the judiciary. Legislative power is vested in the two chambers of Congress, the Senate and the House of Representatives. The judicial branch (or judiciary), composed of the Supreme Court and lower federal courts, exercises judicial power. The federal government's structure is codified in the Constitution.

Two political parties, the Democratic Party and the Republican Party, have dominated American politics since the American Civil War, although smaller parties exist such as the Libertarian Party, the Green  Party, and the Constitution Party. 

Inflation

2,1 percent

Chapter 2 : Automotive market, segments & sales

Total Car park

79 million

New vehicle registrations (Cars, LCV, Trucks)

17,4 million (without trucks)

Top 5 brands (total market)

Toyota, Honda, Nissan, Ford, Hyundai

Model preference top 5 (total market)

Toyota Camry, Honda Civic, Toyota Corolla, Honda Accord, Nissan Altima

Dealer network (including fleet dealer network)

16,500

Used car market/renewal cycle

15,1 million sales in 2017

Chapter 3: Company car market

Total Fleet Park (company cars)/Fleet penetration in total fleet sales

xxx

Evolution fleet sales (last 5 years)

xxx

Top 5 fleet brands (fleet market)

Ford F-105; Chevrolet Silverado; Ford F-250; Ram 1500; Ford Explorer

Fleet Model preference top 5 (fleet market)

Utilities 34 percent; SUV 33,3 percent; Middel-Class 10 percent; Higher-Middel-Class 6,3%; Compact Car 5,7%

Chapter 4: Taxation & legislation

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Chapter 5: Car policies

the main ingredients of today's Car Policy in the Us are

- Health and Safety : obviously, U.S. fleet users care about the safety of their drivers, although it is not covered as extensively as in Europe.

- Environment : there is a convergence between controlling the amount of fuel economy and emissions reductions, although it is more in focus in Europe.  

- Return Vehicle Condition : Drivers are advised in the Car Policy on what to do and what not to do when using the asset. They are also informed   

Chapter 6: Funding methods

The risks associated with operating a fleet include the expenses for fuel, for insurance cover, for service, for maintenance, for repair and for the residual value. The range of methods available for funding corporate vehicles is:

- outright purchase : the fleet user acquires their vehicles via their own available cash reserves or via an bank finance loan. All the risks mentioned above are entirely for the account of the user.

- finance lease : a finance lessor provides the funds for the acquisition. usually, there is a residual value installed in the financial package. The fleet user enjoys any surplus on that RV upon the vehicle's eventual disposal or suffers the deficit if the vehicle is sold less then the estimated RV. SMR costs and risks are for the fleet user.

- full service leasing or operating lease : an operating lease provider supplies the vehicle, but retains the rights of ownership. He usually provides full SMR coverage, and takes the RV risk. Other services offered can include: vehicle insurance cover, accident management, fleet reporting, consultancy advice and replacement car service. 

Chapter 7: Fuel

A litre of petrol costs about $0.76

The U.S. fleet users (or their service providers) nowadays have a very good fuel and driver management process in place.

Fuel represents 35% of TCO in the U.S.

 

Chapter 8 : TCO components

True fleet costs are most efficiently determined by collating all of the operating expenses involved in the vehicle's use during the primary period. Those expenses come in categories such as fuel expenditure, taxes, maintenance and repair. The current TCO methodology is predictive: it assists fleet buyers in their decision-making by helping to determine which vehicles are likely to be the most cost-efficient over their primary period of use. The U.S. has made significantly more progress in the actual management of the drivers that has an impact on the actual Total Cost of Ownership.

U.S. TCO :

  • Maintenance tires & rental represents 8%
  • Collision & safety 6%
  • Fuel 35%
  • Depreciation 39%
  • Funding & management taxes 4%
  • registration & tax 6%
  • other 2%

 

 

Chapter 9: Safety, insurance and telematics

Insurance represents 6% of the TCO in the U.S.
Safety isn't an option in the corporate fleet management, it is a given. In North America the regulations in the green and safety issues mean that driver training is an absolute must, including DoT compliance (ensures that drivers in safety-sensitive positions are regularly tested for drug and alcohol use).

Telematics provide connectivity services to fleet managers and leasing companies to enable them to consult the economy score and mileage of their car park on a webpage or as data feed into the system of a fleet management company.

Chapter 10: Environment

https://www.epa.gov/sites/production/files/2018-01/documents/420r18001.pdf

 

 

Chapter 11: Mobility

A trend in the U.S. is the corporate alternative mobility. Fleet drivers are looking at ways to combine the car with other modes of transport, and solutions like car sharing are becoming more important. Corporate carsharing enables fleet to increase the utilization of pool vehicles.

Examples:

Los Angeles

The broad outline of future mobility policies is aiming to cut pollution and congestion, all stakeholders are expecting fewer and cleaner cars, and more and better alternatives. While state and federal governments set standards and promote innovation, it the cities that are the real laboratories for change. L.A.'s Mobility Plan 2035 aims to redirect L.A.'s century-long fixation on the car towards a more multimodal mobility approach. The Mobility Plan builds on L.A.'s metro system (currently used by 1.5 million people every weekday) and alternatives like separate lanes for biking. The plan's Vision Zero aims to radically reduce L.A.'s 36,000 annual road deaths and injuries. 

San Francisco

The raising of bridge tolls in the peak period on the San Francisco-Oakland Bay Bridge in California in mid-2010 provides a rare opportunity to assess traffic impacts. Carpoolers who previously traveled for free during peak hours were charged an electronic toll under this variable pricing scheme. On the basis of 29 months of time series data, the introduction of carpool charges had a stronger impact on traffic volumes than did peak period pricing of regular traffic. The estimated short-term elasticity of about-0.30 suggests significant numbers of peak hour carpoolers did not travel, switched routes, shifted to public transit, or opted to drive alone. More than half the loss in carpool traffic was estimated to be attributable to the toll increase, a far stronger influence than factors such as rising gasoline prices and unemployment. The estimated elasticity of regular traffic in response to variable pricing was-0.23, an indication that peak period motorists were fairly insensitive to pricing and a reflection of the nondiscretionary nature of many peak hour journeys. It will be important to track trends over time to gain insights into the longer term sensitivity of motorists to variable pricing on natural corridors such as the San Francisco-Oakland Bay Bridge.

Chapter 12: Key trends to watch