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Tuesday, May 23, 2006 

Vol. 2 No. 20

NAFA Conference 2006: Part I:
Pre-Conference Meetings Take on the Big Questions

In the spring of 1987, I attended my first National Association of Fleet Administrators (NAFA) annual conference, and I don’t think I’ve missed one since (that seems a long time ago, I must have been underage at the first one…). In fact, I’m one of those who get in a day early and organize my company’s activities around the conference, just because I like the people and the event. This year was no exception. The 2006 NAFA FMI-LEG (Fleet Management Institute – Law Enforcement Group) was held in Orlando from May 6-9, but I was there May 5th , ready to go...

How Much is that Car in the Window?:
Our Second Remarketing Advisory Panel Convenes in Orlando

The annual NAFA conference probably has the most corporate fleet managers in attendance of any event throughout the year, so we took the opportunity to gather those who arrived early on Saturday for the second meeting of our own, industry- first, Remarketing Advisory Panel. We had some returning members to the panel and one new guest, and concentrated this session on an advanced discussion of pricing, continuing the conversation from our March meeting.

As expected, even with a smaller group we had a full range of opinions and insights. Participants this time included: (Clockwise, from lower left:)

• Patsy Brownson, CAFM, Fleet Director, Cox Enterprises, Inc.
• Shirley Roberts, Fleet Manager, 3M Company
• Yours truly
• Elsie Lucia, Manager, Fleet Services, The Estee Lauder Companies, Inc.
• Frank Memolo, Fleet Manager, Panasonic Corporation of America

First on the Agenda: Vehicle Pricing

I think it’s fair to say that the commercial fleet industry is struggling to transition from a single guidebook that, frankly, has not reflected accurate pricing for a long time, to a more accurate and consistent pricing tool and benchmark. Although the old book’s accuracy had been in question for a while, its utility as a benchmark standard was not questioned for more than 30 years, giving it a certain level of consistency in comparisons that kept things somewhat understandable, if not accurate. For this panel discussion, we prepared a spreadsheet of a representative sample of vehicles of the same make, model and condition, and reflecting the suggested prices using many different guidebooks spread out in comparison. In addition, we included the suggested price using Driveitaway’s proprietary pricing model, and a comparison of the range of values for the same vehicles provided the basis for our first discussion topic.

The more that comprehensive, easy-to-evaluate information and price comparison guides are made available for specific vehicles as a basis for decision making, the more comfortable fleet managers and others responsible for corporate remarketing will be in replacing the old benchmark with something more accurate. In the meantime, I think it will be a while before a single standard pricing tool is used, because a uniform benchmark pricing tool is not yet agreed upon by a critical mass of industry players. Because this issue is so central to the remarketing industry, we at Driveitaway are devoting a lot of company resources not only to developing an accurate pricing tool, but to providing comparison metrics on pricing accuracy both before and after the sale.

Frank Memolo of Panasonic Corp. makes a point while Patsy Brownson of Cox Enterprises looks on.

Second on the Agenda: Condition Reporting

Our panel discussion also veered off into the related topic of condition reporting and condition-based pricing. From our own data of thousands of vehicle inspections and underlying sales results, we presented some thought-provoking charts of how time and mileage typically affect condition, and how these factors translate to the ultimate price received for the remarketed unit. We separated condition evaluations into four major category sections and then charted how time/mileage affects the overall condition/costs in each of these areas. The purpose here, in addition to gathering opinions and direction on the usefulness of this data, was to hear how accurate vehicle condition and estimated damage information might affect price and the timing of turn-ins. This type of information has never before been available upstream, but with an upstream sales program, becomes available for practical use.

In conclusion, the second installment of the Remarketing Advisory Panel was another valuable experience that could have stretched on for hours. I look forward to hosting the next one, probably at the Automotive Fleet and Leasing Association’s annual conference, September 13-15, in Rancho Mirage, California.

An AFLA Meeting before NAFA…why not?

Right after we held our second Remarketing Advisory Panel meeting, we hosted the Automotive Fleet and Leasing Association Board of Director’s meeting in the same spot, right in our suite. A more knowledgeable and affable Board group you couldn’t assemble in this business, led by current President Patsy Brownson from Cox Communications; Immediate Past President Rick Nicoletti from Napelton Fleet Group; Executive Vice President Mark Conroy from LeasePlan USA; and Vice President Elsie Lucia from Estee Lauder (okay, a few of us didn’t get out of our seats for the entire afternoon…).

This was a closed Board meeting, but I don’t think anyone would mind my mentioning one topic of conversation, that is, the annual AFLA Conference coming up September 13-15, in Rancho Mirage, California. Organized by the abovementioned Elsie Lucia, (not only our Remarketing Panel member but also VP of the Association and in charge of the conference), the conference is packed with presentations and panel discussions by key industry leaders, and includes a keynote presentation by John Davis, the producer, host and creator of MotorWeek, one of television’s most popular and original automotive programs. I’ll offer more event details in a later blog, but let me tell you, at a $365 registration fee, this conference is the best bargain in the industry.

So, if you are remotely interested in this area of the fleet industry, I strongly encourage you to go to sign up for the AFLA Conference at http://www.aflaonline.org/displaycommon.cfm?an=4
I don’t think I ever met anyone I encouraged to go who didn’t thank me afterward and become an AFLA regular.

Next Time: NAFA Part II (including the newly awarded “Fleet Manager of the Year” and “Fleet Executive of the Year” for 2006 and a few pictures from the late night party we gave in honor of the winners and nominees for these prestigious awards…)

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