SMMT data[i] has revealed that new HGV registrations rose consistently through 2022-2023 as demand soared. We are seeing continuing evolution in the truck market, which is affecting our criteria as major HGV buyers across all the OEMs.
It can be challenging to keep abreast of all the issues and factors to consider, even with a dedicated acquisition team. Many customers of course juggle occasional or periodic vehicle acquisition with all the other day-to-day and pressing matters that are part of a transport manager’s increasingly multifaceted role.
Extended lifecycles, a mixed acquisition strategy across ownership, leasing and flexible rental, new legislation and ongoing maintenance/support schedules need to be considered as part of the overall acquisition strategy.
Fight the tendency to stick with what you know
It is hard to keep up with the constant changes to vehicle specifications and fit-outs. It can be tempting to order the same vehicle again after a five-year lease is up, especially when buying from the same local supplier.
In such a dynamic market, ensuring the right ancillary equipment, for example cranes, in the face of constant innovation is as much a challenge as selecting the best body and chassis choices.
It’s important to talk to drivers, customers and users to find out what they need and see if better, risk-reducing options have become available since the last time. Looking across OEMs can also help to establish whether a different manufacturer could be the best route.
Operators that aren’t buying commercial vehicles every week may not be as attuned to the market as they need to be, so it’s worth drawing on third party expert knowledge to ensure the vehicle fit-out is right for current and future needs.
Stick closely to support
Fleets may become badge-specific because they have an on-site OEM maintenance or are located close to the dealer.
While it may be beneficial from a features/spec perspective to select a different OEM, the importance of having support close at hand is essential to reduce vehicle downtime. Using the provider just down the road may be the right move if the best alternative is located hundreds of miles away.
Business working from multiple sites, on the other hand, will often want national coverage to remove the need to negotiate with individual dealers.
Assume protracted lead times
Thankfully, the vehicle build industry has begun to recover from recent delays, but the continuing volume of pent-up demand means there are still back-ups. Refrigerated vehicles might not be available until 2025, for example, and cranes for the construction industry might take 18 weeks or more.
Aligning the vehicle acquisition strategy to build capacity may mean running existing vehicles for longer and accommodating higher maintenance needs. Alternatively, it may mean rethinking the acquisition strategy. If you can’t buy the vehicle, can it be sourced differently, such as through leasing or rental from suppliers who already have them on order?
Focus on compliance
New vehicle acquisition also needs to be aligned to the wealth of emerging legislation affecting HGVs, ranging from GSR and DVS to the impact of Clean Air and Low-Emission Zones, which vary regionally. Don’t assume that new vehicles are ready-built to meet all the new requirements, and especially if the vehicles will travel to other countries.
Similarly, many fleets are a mix of owned, leased and rented vehicles, and this brings flexibility to ensure compliance and enable them to keep the O-Licence.
For example, does the entire fleet need to be DVS-compliant if only some of the vehicles operate in London? Are the vehicles suitably futureproofed to meet your needs two or three years from now? Is the requirement just for the short term and therefore a more flexible financing package makes sense?
Build in flexibility
Flexibility is increasingly important in effective acquisition and has several levels. Consider how a multi-manufacturer solution could bring greater flexibility in the long term, or how flexible acquisition on leased or rented trucks over variable durations, including vehicles built to the organisation’s particular specification, can build a stronger fleet. A flexible long-term strategic acquisition plan encompassing all options creates more agility.
Flexibility is also an aspect of day-to-day fleet operation: for example, blending on-site and mobile maintenance and combining dealership services and third-party networks.
Total cost of ownership (TCO)
Acquiring HGVs comes down to TCO. A good upfront deal is important, as is ensuring that it doesn’t compromise the fleet with vehicles that are not entirely fit for purpose for seven years or more. Businesses also need to consider all direct and indirect costs associated with the fleet – for example, the added VOR time if they need to take their vehicles to a dealership for servicing, maintenance or repair.
Analyse and forecast business needs as far in the future as possible as well as ensuring the spec is fit for purpose today.
Author: Danny Glynn, managing director of Enterprise Flex-E-Rent
[i] SMMT Data
