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5/04/12

Decreased Rail Capacity Delays OEM Shipments - Update

OEM updates - Ford: Improved Rail Situation Reducing Shortages (received as of 5/04/12, 12:30 pm CST):

Ford has issued the following update: The rail car situation at Ford has improved. The shortages have been reduced by two-thirds, and rail traffic flow is improving. As previously reported, the automotive industry is experiencing delays in shipments due to a shortage of available railcars.

4/19/12

Explosion in Germany May Cause U.S. Production Disruption

OEM updates - IMPACT OF P12 RESIN REGARDING FLEET PRODUCTION (received as of 4/19/12, 10:33 am CST):

Chrysler: Chrysler Group LLC is aware of the tragedy that took place on March 31 at the Evonik Industries AG facility in Marl, Germany. Our thoughts and prayers are with all those impacted by this terrible event. Evonik is a sub-tier supplier to Chrysler. We are actively monitoring the situation with our supply base to assess and mitigate any risk to our operations. At this time we do not anticipate any production impacts as a result of this tragedy.

We will update as information becomes available.

4/18/12

Explosion in Germany May Cause U.S. Production Disruption

OEM updates (received as of 4/18/12, 3:33 pm CST):

Ford: Ford has stated that it may know by May 7 whether or not any of its plants will be impacted by an expected shortage of a plastic resin used in brake and fuel systems. The industry in general is concerned that a shortage of the chemical could disrupt production in some U.S. auto plants.

Automakers met Tuesday at a summit in Troy, Michigan to consider their options after an explosion shut down a German factory that makes the key chemical.

About 200 people, including more than 100 suppliers and representatives of auto companies, gathered to discuss alternative plastic resins and ways to boost supplies from three other major producers.


OEM updates (received as of 4/18/12, 10:31 am CST):

Mazda: Mazda issued the following information. "As of right now, there are no predicted production issues for Mazda. Most of Mazda's supply chains for Japan production are in Southeast Asia, and the only vehicle we build in the U.S. is the Mazda6. Since it's slated for an early 2013 build-out (in production now/all-new 2014 vehicles built in Japan), all of the parts have been ordered and are either in stock or in transit. If the situation changes we'll be advising everyone immediately, but as of right now, no additional production challenges are predicted from the CDT situation."


OEM updates (received as of 4/18/12, 10 am CST):

Toyota: You may see media reports about a potential supply chain interruption for a resin known as PA-12. This resin is used in fuel and brake line coatings, flexible hoses, and quick connectors supplied to many automakers.

Toyota issued the following statement: "Like other automakers, Toyota is assessing the supply situation in North America. Until the assessment is complete, we do not know if there will be an impact on production. Our plants are operating normally, and we continue to monitor the situation."


4/17/12

Explosion in Germany May Cause U.S. Production Disruption

Donlen received the following communication today: "An explosion at a manufacturing plant in Germany is expected to cause a plastic resin shortage that could disrupt some U.S. auto production, according to an IHS Automotive report released this morning." It went on to say, "General Motors confirmed that some of its suppliers have been affected by the disruption, and other auto companies said they were assessing the situation." Read the full text below.

We will continue to monitor this situation closely and keep you updated as we receive any information.

Received Tuesday, April 17, 2012, 1:32 pm (full text):

An explosion at a manufacturing plant in Germany is expected to cause a plastic resin shortage that could disrupt some U.S. auto production, according to an IHS Automotive report released this morning.

Auto industry leaders are hosting a summit today in Southfield to discuss the shortages of a component called CDT, a chemical that is critical to the production of a plastic resin called Nylon 12, which is used to make brake and fuel lines.

IHS today projected that shortages of the obscure component are "likely to be serious." The March 31 explosion killed two at supplier Evonik Industries.

General Motors confirmed that some of its suppliers have been affected by the disruption, and other auto companies said they were assessing the situation.

Evonik and one of its customers, Arkema, whose Nylon 12 production has already been disrupted, account for about half of worldwide manufacturing capacity for the resin, IHS Chemical analyst Paul Blanchard said in a report. Blanchard projected that Evonik wouldn't regenerate production capacity for at least six months, leaving the auto industry scrambling to find substitute parts for a resin that was already in short supply.

"The ability of Evonik and Arkema to find alternate sources of CDT is very limited and it is doubtful that the CDT shortage can be made up," Blanchard said. "In the short term auto and truck production will be affected."

Automakers are discussing the issue and trying to identify possible substitute components at a one-day summit organized by TI Automotive and the Automotive Industry Action Group.

Some of GM's Tier One suppliers "have had exposure" to the plant explosion, spokeswoman Kelly Cusinato said in an email. She said it was too soon to project whether it would affect production plans.

"We have implemented a global work team, comprised of GM purchasing, engineering and suppliers, including Evonik, and are working to allocate and prioritize existing inventories and also find alternative process material solutions," she said.

Speaking to reporters at an event in California, Ford Motor CEO Alan Mulally said it was unclear whether the resin shortage would cause problems for the automaker.

"We're analyzing it right now," he said, calling the problem "pretty widespread."

Ford spokesman Todd Nissen said in an email that the automaker is monitoring the situation but has not yet experienced any disruptions.

Mike Goss, general manager of external affairs for Toyota Motor Engineering & Manufacturing North America, said the Japanese automaker is assessing the impact to its supply chain.

"Until the assessment is complete, we do not know if there will be an impact on production," Goss said in an email. "Our plants are operating normally and we continue to monitor the situation."

If you have questions about any of your outstanding orders, please contact your Donlen account manager.


4/17/12

Decreased Rail Capacity Delays OEM Shipments

The automotive industry is experiencing delays in shipments due to a shortage of available railcars. GM, Chrysler, Ford, and Toyota are working diligently to fulfill orders on time while urging railroads to continue increasing capacity. The OEMs report that the railroads are responding by purchasing new cars and the situation is improving.

GM
GM says that network and velocity improvements, and the purchase of some new railcars, have led to an improvement of almost 10 percent in loaded transit time for its vehicles this year compared with 2011. It is taking the following actions to help mitigate delays:

  • Using short sea as a shipping alternative from Mexico
  • Investigating the feasibility of short sea shipping for certain other long-distance transit lines
  • Working with the railroads on additional initiatives to improve velocity and railcar cycle time
  • Being transparent with shipping vendors about its industry forecasts so they can plan future capacity more effectively

Chrysler
Chrysler has seen only "spot shortages" and there have been some issues getting units out of Mexico. The company has responded by prioritizing sold units. Like other OEMs, it is in contact with the railroads regarding increasing capacity. Overall delivery times have actually been below average in recent months.

Ford
Ford has been in contact with the major railroads seven days a week and is starting to see some improvement. It is working with the railroads to set priorities and is closely monitoring the aging of units at each location. Ford says its executive management team will attend the upcoming Rail Summit.

Toyota
Toyota has not experienced many delays this year but expects increased demand for railcars this year. It is implementing some countermeasures to avoid delays, including:

  • Accurately forecasting rail needs by plant
  • Destination block loading, which facilitates rapid off-loading at the destination
  • Closed loop dedicated railcar lanes for heavy volume destinations
  • Setting up alternative rail loading locations
  • Reviewing truck deviation options
  • Involvement of logistics group in industry task force
  • Automotive industry countermeasures:
    • Decreasing railcar cycle time
    • Increasing seven-day a week unloading
    • Alternative rail interchanges to improve network congestion

4/9/12

Ontario Increasing License and Registration Fees

The government of Ontario, beginning this year, will increase license and registration fees incrementally year by year until 2014. Increases include vehicle license validation, truck and bus permit fees, and trailer and vehicle permits. For a complete list of fee changes, visit the Ontario Ministry of Transportation (MTO) web site.


3/23/12

Texas Storm Disrupts Rail Freight

Donlen has received the following information that may affect OEM deliveries. Severe weather in southeastern Texas has disrupted rail transportation. Union Pacific reports delays of up to approximately 72 hours. Donlen will post an update should the delays be extended due to continued adverse weather.


1/6/12

Early Model 2013 MY Commercial Fleet Incentives Announced

Ford has announced the 2013 Commercial Fleet Incentives on the following vehicles:


Vehicle Vehicle National Fleet Incentive $(56M) Ford Cars & CUV's Edge $1,500 Flex $2,000 Taurus $2,000 Ford Trucks & SUV's Explorer $1,500 Lincoln Cars, CUV's & Trucks MKS $2,000 MKT a/ $2,000 MKX $2,000

2013 National Fleet Incentives include: National Fleet Incentive, Fleet Special Account Credit and all applicable Commercial Fleet Credits.

a/ 56M is not compatible with MKT Limo(J5L/400A), Livery(J5N/J5M) or Hearse(J5L/401A) packages

Chrysler Canada has announced price and freight increases for 2012

All orders that were submitted prior to January 2, 2012, as well as any bona fide sold Fleet or Lease order submitted on or before Monday, January 16, 2012, will automatically be price protected. Price protection does not apply to the freight increase. Effective with shipments dated January 3, 2012, select base and option prices have been adjusted.


7/8/11

Paint Balanceout Replacement Plan as of June 27, 2011


Vehicle Current Production Color Paint Sales Code Estimated Run-out Scheduling Week Replacement Paint Color Paint Sales Code Model Year Intro Replacement Paint Estimated Scheduling Timing Mustang Kona Blue L6 December No replacement         Lava Red UZ Balanced Out Sterling Gray UJ 12MY September   Red Candy U6 Late July Re-introduce Red Candy RZ 12MY October Taurus, Explorer Bordeaux Reserve FQ Balanced Out Cinnamon HT 12MY June MKS Red Candy U6 Balanced Out Re-introduce Red Candy RZ 12MY June   Kona Blue L6 Balanced Out Dark Blue Pearl DX 12MY June   Tuxedo Black UH Balanced Out Black UA 11MY May Fiesta Bright Magenta L7 Balanced Out 11MY color only - no replacement -   N/A   Blue Flame SZ Balanced Out Violet Grey VG 12MY June   Red Candy U6 Balanced Out Re-introduce Red Candy RZ 12MY June   Tuxedo Black UH Balanced Out Black UA 12MY June F-150 Red Candy U6 Balanced Out Re-introduce Red Candy RZ 11MY June   Tuxedo Black UH Balanced Out Black UA 11MY May Fusion MKZ Tuxedo Black UH Balanced Out Black UA 12MY May         Cinnamon HT 12MY June         Re-introduce Red Candy RZ 12MY June Escape Sangria Red JV Balanced Out Toreador Red FL 12MY June   Tuxedo Black UH Balanced Out Black UA 12MY May Super Duty Tuxedo Black UH Balanced Out Black UD 11MY May Expedition, Navigator Tuxedo Black UH Balanced Out Black UA 11MY May Super Duty Royal Red UK Balanced Out Autumn Red GT 12MY July Expedition Navigator Royal Red UK Balanced Out Autumn Red GT 12MY '12 Launch - July Focus Kona Blue L6 Balanced Out Sonic Blue SN 12MY June   Red Candy U6 Balanced Out Re-introduce Red Candy RZ 12MY June   Tuxedo Black UH Balanced Out Black UA 12MY June Edge MKX Earth HS Balanced Out Mineral Grey TK 12MY August   Bordeaux Reserve FQ Balanced Out Cinnamon HT 12MY August   Tuxedo Black UH Balanced Out Black UA 11MY May   Kona Blue L6 Balanced Out Dark Blue Pearl DX 12MY August   Red Candy U6 Balanced Out Re-introduce Red Candy RZ 12MY August Flex MKT Earth HS Balanced Out Mineral Grey TK 12MY July   Bordeaux Reserve FQ Balanced Out Cinnamon HT 12MY June   Tuxedo Black UH Balanced Out Black UA 12MY June   Kona Blue L6 Early June Dark Blue Pearl DX 12MY June   Red Candy U6 Balanced Out Re-introduce Red Candy RZ 12MY June Econoline Royal Red UK Balanced Out 11MY color only - no replacement -     Ranger Red Fire G2 Balanced Out Toreador Red FL 11MY June

6/17/11

Toyota North America is expected to reach full production by September. According to a statement released yesterday, "production is recovering earlier than originally anticipated following the March 11 earthquake and tsunami in Japan. On average, current production has improved to more than 80 percent through August. Eight of the company's 12 North American-built models returned to 100 percent production on June 6."

6/10/11

Stock Ordering Challenges
It's been a tough few months for manufactures, fleet managers, and fleet management companies as all try to fill orders. Donlen's Cindy Butera, Manager of Vehicle Acquisition Services, has been on the front lines working diligently to fill orders for our customers. In her recent blog post, she explores some of the current challenges, and offers suggestions on ways to help get the vehicles you want. Read more here.

Subaru of America Restart Proves Challenging
Subaru of America has advised that the timetable for resuming full production in both Japan and the U.S. is now coming into focus and unfortunately the outlook isn't as hoped. Order acceptance dates for 2012 models remains "to be determined." Initial deliveries are anticipated to commence on February 1, 2012. Additionally the all-new Impreza will not be available for fleet ordering due to an extremely slow launch resulting in minimal availability. Subaru may include the Impreza in its fleet vehicle plan sometime later in Spring 2012 should availability improve. Subaru understands the impact on fleet customers, hoped to be able to communicate better news and sincerely appreciates your patience and understanding during this "restart" period.

Ford F-Series Super Duty (F250-F550) Tire Update
Donlen received the following updates from Ford:

  • F450/F550: Ford will provide a list early next week of the F450/F550 orders that cannot be built as 2011s as a result of the 19.5" tire supplier constraint. Ford has committed to price protect these orders and to prioritize the build of these orders for customers who wish to reorder 2012s. Ford anticipates producing these prior to the end of September.
  • F250/F350:  Ford anticipates being able to build all 2011 orders for customers who switched to the 17” all-season tires from 17” all-terrain tires.

Ford Paint Supply Update
Ford continues to update their exterior paint plans for the remainder of the 2011MY and for the startup of the 2012MY. Ford anticipates that metallic paints will be available again in the fourth quarter of this calendar year. The updated paint replacement list plan can be found here.

  • Paints that balanced out this week include: Blue Flame (SZ) and Tuxedo Black (UH): Fiesta
  • Paint at greatest risk of balancing out next week is: Bright Magenta (L7): Fiesta

Toyota 2012MY Plan Announced
Toyota is offering price protection on all 2012MY orders (excluding 4Runner, Highlander Gas, and Prius) at the latest MY11 price at the model level that are replacements for orders cancelled by Toyota due to the March 2011 earthquake. Please note: orders not cancelled by Toyota do not qualify. The following criteria applies:

  • Orders must be for the same model and quantity as originally ordered.
  • Orders must be placed within 60 days of the first order date specified on the below chart with a requested delivery date within 120 days of order placement.
  • Price increases due to options and/or package changes between model years will not be price protected.
  • Changes in the incentive amounts between model years will not be price protected

Initial order submission dates and estimated order delivery windows


Series MY12 (H1) Commercial 1st Order Date 1st Delivery Month Notes 4Runner TBD TBD TBD   Avalon $1,000 8/1/2011 Nov/Dec 11 Fleet only decontent package available Camry Gas $400 8/1/2011 Nov/Dec 11 All new generation- Base grade available Camry Hybrid $0 1/1/2012 Apr/May 12 All new generation – Two grades available Corolla $1,000 10/1/2011 Jan/Feb 12   Highlander Gas TBD TBD TBD   Highlander Hybrid $0 11/1/2011 Feb/Mar 12   FJ $0 10/1/2011 12-Jan   Landcruiser $0 11/1/2011 12-Feb Preapproval required Matrix $1,000 10/1/2011 Jan/Feb 12   Prius TBD TBD TBD   Prius V TBD TBD TBD ALL NEW Prius C TBD TBD TBD ALL NEW Prius Plug In TBD TBD TBD ALL NEW – available in ZEV states only* RAV4 $800 10/1/2011 Jan/ Feb 12   Sequoia $1,000 8/1/2011 Nov/Dec 11 Preapproval required Sienna $700 6/13/2011 Sep/Oct 11 Mobility model available Tacoma $750 9/1/2011 Dec/Jan 12 Minor change Tundra (Dbl/Crewmax) $2,500 6/13/2011 Sep/Oct 11 Regular cab delay until Dec Venza $400 9/1/2011 Dec/Jan 12   Yaris L/B $200 11/1/2011 12-Feb All new generation- Sedan not available

Steps to take to receive price protection:

  • When ordering in FleetWeb,please type the phrase "Earthquake Replacement" in the special instructions field
  • Donlen will add these comments to the order when placing it with Toyota and send a list of the order numbers to Toyota to ensure price protection is applied to each order 

Toyota is also offering two percent price assurance on 2012MY orders for select models (models not listed will not receive price assurance) received prior to the announcement of 2012MY pricing as noted in the below table. Please note the delivery month requirements. Approved Fleet orders for the 2012 model year received at TMS as noted in the table below will be price assured at base price levels plus the percentage listed. Increases resulting from any standard equipment/specification changes, safety equipment, required emissions, factory-installed options, port installed options, destination, processing, handling (DPH) and fuel charges are ineligible and excluded from price assurance calculations.


Toyota Price Assurance


Series Delivery Month no later than Price Not to Exceed prior MY Price On Price Assurance % Avalon Jan 31 '12 May 31 '11 2% Camry Gas Jan 31 '12 May 31 '11 2% Corolla Feb 28 '12 May 31 '11 2% Matrix Feb 28 '12 May 31 '11 2% RAV4 Feb 28 '12 May 31 '11 2% Sequoia Jan 31 '12 May 31 '11 2% Sienna Oct 31 '11 May 31 '11 2% Tacoma Jan 31 '12 May 31 '11 2% Tundra Sep 30 '11 May 31 '11 2% Venza Jan 31 '12 May 31 '11 2%

Toyota and Donlen sincerely appreciate your patience as production capabilities were verified.



Paint Balanceout Replacement Plan as of June 9, 2011


Vehicle Current Production Color Paint Sales Code Estimated Run-out Scheduling Week Replacement Paint Color Paint Sales Code Model Year Intro Replacement Paint Estimated Scheduling Timing Mustang Kona Blue L6 Early Aug Sonic Blue SN 12MY August   Lava Red UZ Balanced Out Sterling Gray UJ 12MY September   Red Candy U6 Late July Re-introduce Red Candy RZ 12MY October Taurus Explorer Bordeaux Reserve FQ Balanced Out Cinnamon HT 12MY June MKS Red Candy U6 Balanced Out Re-introduce Red Candy RZ 12MY June   Kona Blue L6 Balanced Out Dark Blue Pearl DX 12MY June   Tuxedo Black UH Balanced Out Black UA 11MY May Fiesta Bright Magenta L7 Early June 11MY color only - no replacement -   N/A   Blue Flame SZ Balanced Out Violet Grey VG 12MY June   Red Candy U6 OK thru '11 B/O Re-introduce Red Candy RZ 12MY June   Tuxedo Black UH Balanced Out Black UA 12MY June F-150 Red Candy U6 Balanced Out Re-introduce Red Candy RZ 11MY June   Tuxedo Black UH Balanced Out Black UA 11MY May Fusion MKZ Tuxedo Black UH Balanced Out Black UA 12MY May         Cinnamon HT 12MY June         Re-introduce Red Candy RZ 12MY June Escape Sangria Red JV Balanced Out Toreador Red FL 12MY June   Tuxedo Black UH Balanced Out Black UA 12MY May Super Duty Tuxedo Black UH Balanced Out Black UD 11MY May Expedition, Navigator Tuxedo Black UH Balanced Out Black UA 11MY May Super Duty Royal Red UK Balanced Out Autumn Red GT 12MY July Expedition Navigator Royal Red UK Balanced Out Autumn Red GT 12MY '12 Launch - July Focus Kona Blue L6 Balanced Out Sonic Blue SN 12MY June   Red Candy U6 Balanced Out Re-introduce Red Candy RZ 12MY June   Tuxedo Black UH Balanced Out Black UA 12MY June Edge MKX Earth HS Balanced Out Mineral Grey TK 12MY August   Bordeaux Reserve FQ Balanced Out Cinnamon HT 12MY August   Tuxedo Black UH Balanced Out Black UA 11MY May   Kona Blue L6 Balanced Out Dark Blue Pearl DX 12MY August   Red Candy U6 Balanced Out Re-introduce Red Candy RZ 12MY August Flex MKT Earth HS Balanced Out Mineral Grey TK 12MY July   Bordeaux Reserve FQ Balanced Out Cinnamon HT 12MY June   Tuxedo Black UH Balanced Out Black UA 12MY June   Kona Blue L6 Early June Dark Blue Pearl DX 12MY June   Red Candy U6 Balanced Out Re-introduce Red Candy RZ 12MY June Econoline Royal Red UK September 11MY color only - no replacement -     Ranger Red Fire G2 Balanced Out Toreador Red FL 11MY June

5/27/11

Ford Tire Challenges

Due to supplier constraints, Ford is encountering production challenges related to tires. Listed below is information regarding each condition and Donlen recommendations and actions:

F450/F550 Super Duty equipped with 19" Tires (option code TFB): Orders have exceeded the supplier's capacity to provide 19" tires. There is no alternative tire available. Ford anticipates that this could limit production output through the end of the third quarter of the calendar year, but hope to be back to full capacity by the 4th quarter. As a result, orders not produced will have to be cancelled. Impacted customers are being notified. Alternatives for consideration include the following:

  • Reorder as a 2012 and receive priority build for 2012 startup, scheduled to begin in late July. It is anticipated (but not yet official) that Ford will price protect these orders. Donlen will provide Ford with a list of the factory order numbers that are reordered as 2012’s to ensure priority build status.
  • Consider pulling a comparable Ford or Dodge unit from an upfitter pool with the understanding that the upfitter will only sell Donlen the unit if they perform upfitting on the vehicle. Please let your Account Manager know if you are interested in this option. Donlen Truck personnel are currently checking these pools to see what is available.
  • Consider searching dealer inventory for a comparable Ford or Dodge, but please keep in mind dealer inventories are limited and these aren't the type of vehicles most dealers stock.

Ford F250/F350 Super Duty Pickup models equipped with 17" all-terrain tires (option code TBM): Orders have exceeded the supplier's current production capacity. Ford is recommending changing the tires to 17" all-season tires (option code TBK). Orders not changed will require cancellation, and Donlen is reviewing orders with all impacted customers. It is unlikely that Ford will price protect orders cancelled and resubmitted as 2012 orders since an alternative tire is available. Ford has confirmed that there are no other 17" all-terrain tire options available. The all-season tire will perform better on paved roads, provide a better ride, improve fuel economy, and reduce traction in off-road applications. Donlen recommends your decision be based upon the percentage of utilization on paved roads verses off-road. Alternatives for consideration include the following:

  • Consider pulling a comparable Ford, Chevrolet, or Dodge unit from an upfitter pool if your vehicle is being upfitted, with the understanding that the upfitter will only sell Donlen the unit if they perform upfitting on the vehicle. Please let your Account Manager know if you are interested in this option. Donlen Truck personnel are currently checking these pools to see what is available.
  • Consider searching dealer inventory for a comparable Ford, Chevrolet, or Dodge but please keep in mind dealer inventories are limited.

Ford F150 models equipped with 17" all-terrain tires (option code T7H): Order lead times are extending. Donlen strongly recommends placing your final 2011 model year F150 orders requiring 17" all-terrain tires as soon as possible. This situation is expected to extend to the F150 models and orders placed closer to the published final order due date may not be able to be produced with all-terrain tires.

Paint Supply Update

Ford continues to update their exterior paint plans for the remainder of the 2011MY and for the startup of the 2012MY. A full list of paint issues can be found here. The paint at greatest risk in the coming weeks:

  • Bright Magenta (L7): Fiesta
  • Lava Red (UZ): Mustang
  • Kona Blue (L6): Ford Edge/Lincoln MKX


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