mmmmm dd, yyyy
RE: A Recommendation for the Car Model of the Delivery Fleet
Introduction
I wrote this report to provide a recommendation in choosing a car model for the fleet of 35 that we plan to purchase. We need a car that would support our business model of online ordering meals from hundreds of restaurants in Toronto. The choice of the car would be based on criteria that would reflect economy, reliability and other factors.
The discussion would present the criteria for choosing the car models and their makers. The three options would then be described and explained on how each would meet the criteria; a recommendation would then be chosen. There would be two selections with their own criteria. The first one is the selection for car makers and second would be the selection of the car model for each car-maker. Three car makers would be chosen and for each car maker, a car model would be selected that would best represent the needs of Just Eat.
Selecting the Car Makers
The three car makers must have a strong presence in Toronto for easy access for maintenance and repairs. They must belong in the top ten among the world’s car makers as we do not want a supplier who will close while Just Eat is in business. The car maker must also have a good record in safety. It would be bad publicity if the company would be involved in accidents due to vehicle defects.
Among Toronto’s top selling cars (Cato, 2013), the following are in the world’s top ten (Pai, 2015) in descending order of sales in Toronto:
MAKER SALES COUNT (2013)
Hyundai 10,296
Honda 5,280
Ford 5,134
Toyota 4,723
Volkswagen 4,023
GM 4,008
The number of cars sold is an indication of the availability of servicing for repair and maintenance. In terms of safety, the following are in the top fifteen (Jackson, 2016) with their percentages of models with a 5-star NHTSA ranking:
MAKER RANK % WITH 5-STAR NHTSA
Hyundai 3 39.0%
Honda 5 35.3%
Ford 11 19.0%
GM 12 18.8%
Toyota 13 17.0%
Volkswagen 15 15.4%
Based on those two criteria, we would consider car models from three car makers: Hyundai, Honda and Ford.
Selecting the Car Models
We specified the following criteria: fuel economy and reliability. I have added the following as I consider them as significant as well: storage, cost, safety and potential for alternative fuels.
The approach is to choose the smallest sedan in the car maker’s line-up. Sedans would generally meet the requirements for food delivery. Because they have smaller engines, they are fuel efficient and there is enough storage in the trunk and passenger seats to place the food packages. They are also easier to park in small parking spaces. There must also be enough safety features to protect the driver and the general public.
The following typical criteria were not considered as they do not support the operational goals of Just Eat. Engine size and power is not a factor as there is no emergency situation in the food delivery business to warrant top speeds. Interior comfort and amenities will only be needed if customers will be passengers. On the contrary, interior space is more important to carry the food deliveries than other fixtures inside the car. Car design and styling is also not important as the cars would be painted anyway with advertisements. As long as the cars don’t look dilapidated, then the exterior looks should not be a factor for the business.
Option 1: Honda Fit
The Fit is a sub-compact with a 1.5L engine. It is available in Ontario and is priced at $14,790. It has a fuel economy of 6.4L/100km for highway driving and 8.1L/100Km for city driving for an average of 7.3L/100km. It has a combined passenger and cargo volume of 2,710L (2016 Honda Fit DX., n.d.).
Based on the J.D. Power Vehicle Dependability Study, the Fit has a reliability rating of 3.5 out of 5 (Honda Fit Reliability, n.d.). There has only been one safety recall so far and that is the rear grab handles may pierce the air bags when they are activated. From the U.S. Insurance Institute for Highway Safety and National Highway Traffic Safety Administration, it has a safety score of 9.4 out of 10 having the following safety features: ABS brakes, airbags, child safety, rear center seatbelts, head rests for the 5 passengers.
The Fit has been described as an easy and pleasant car to drive with its light steering and touchscreen infotainment system. This would have the effect of raising the morale of drivers who can find their jobs comfortable. (Honda Fit. n.d.)
The Fit is a popular choice for meal delivery services. One company in Los Angeles named NutriFit chose it because of ample cargo capacity and a fuel consumption of 33 miles per gallon (MPG). It was also attracted to its sport look and green image. Nutrifit tested the storage capacity with 30 delivery bags and they fitted. (Brandon, J. (2011).
Honda also has a good potential for alternative fuels which can further improve operations efficiency. There is already the Fit EV which is available in the market but not yet in Toronto. NutriFit will keep track of the number of charging stations in LA. The number and location of charging stations in the business territory will be crucial for delivery services.
Option 2: Hyundai Accent
Hyundai’s sub compact is the Accent SE Sedan and it has a 1.6L engine. It has total internal volume of 2,927L. It has a fuel economy of 10.5L/100km for city driving, 7.4L/100km for highway driving and a combined 9.1L/100km.
Based on the J.D. Power Vehicle Dependability Study, the Accent has a reliability rating of 4.0 out of 5. There had not been any recalls for the Accent. From the U.S. Insurance Institute for Highway Safety and National Highway Traffic Safety Administration, it has a safety score of 8.0 out of 10. The Accent sells for $14, 475. It does not have a version for alternative fuels.
The Accent has an elegant sporty design and has a 10-year/100,000-mile powertrain warranty. One major miss is the lack of a rearview camera.
Option 3: Ford Fiesta
The subcompact of Ford is the Fiesta S Sedan and is also available in Toronto. It has 1.6L engine with a fuel economy of 8.5 L/100Km for city driving, 6.5 for the highway and 7.6 for combined. It has an internal volume of 2,410L (2016 Fiesta S Sedan, n.d.). The Fiesta boasts of a tight agile steering and a tovght road grip which makes it ideal for city driving on a rush, like those for goods deliveries.
Based on the J.D. Power Vehicle Dependability Study, the Fiesta has a rather low reliability rating of 2.5 out of 5 although it has not had any recalls. Its safety rating from the U.S. IIHS and NHTSA is 8.7. The Ford Fiesta sells for $15,365.
The Fiesta had been a best-selling car in the UK as it combines excellent features with affordability.
Conclusion and Recommendations
The values for the various options will be tabulated against our selection criteria. For fuel economy, we used the integrated value for both city and highway driving. Toronto is 97th among the world’s densest cities (The largest cities in the world by land area, population and density, n.d.), so driving conditions can be mixed.
Fuel economy, reliability and storage are the most important criteria and the Honda Fit ranked 1st, 2nd and 2nd respectively. The reliability is above the mean of 2.5 while the storage of 2,710L is more than enough for typical deliveries as vouched for by the company Nutrifit. It even ranked 1st in the rest of the criteria.
Hyundai Accent suffered from a comparatively low fuel economy while Ford’s reliability is hardly satisfactory and is the most expensive. Both have no options for alternative fuels.
Honda Fit also scored very high in safety which would help protect our public image. The availability of the version for alternative fuels can provide opportunities for future fleet upgrades when charging stations are more numerous and the price of the vehicle may go down.
With a clear best choice, I recommend that we proceed to purchase or lease the 35 units for Honda Fit.
References
Cato, J. (2013, March 21). Top 10: The most popular cars and trucks in Canada this year. The Globe and Mail. Retrieved July 20, 2016 from http://www.theglobeandmail.com/globe-drive/news/trans-canada-highway/top-10-the-most-popular-cars-and-trucks-in-canada-this-year/article10080000/
Jackson, S. (2016, January 14). The 15 safest car brands. Washington;s Top News. Retrieved July 20, 2016 from http://wtop.com/consumer-news/2016/01/15-safest-car-brands/
Pai, P. (2015, August 17). Top 10 Largest Car Companies in the World. Tharawat Magazine. Retrieved July 20, 2016 from http://www.tharawat-magazine.com/facts/10-largest-car-companies/
2016 Honda Fit DX. (n.d.). Retrieved July 20, 2016 from http://www.torontohonda.com/new-vehicles/select-trim/2016-honda-fit-449-subcompact-%20-%20-manual-front_wheel_drive-%20-%20.html
Honda Fit Reliability. (n.d.). Best Cars. U.S. News and World Report. Retrieved July 20, 2016 from http://usnews.rankingsandreviews.com/cars-trucks/Honda_Fit/Reliability/
2016 Fiesta S Sedan. (n.d.). Retrieved July 20, 2016 from http://www.ford.ca/cars/fiesta/trim/?trim=ssedan
Brandon, J. (2011, August 4). How to Choose the Right Vehicle for Your Business. Inc. Retrieved July 20, 2016 from http://www.inc.com/guides/201108/how-to-choose-the-right-vehicle-for-your-business.html
The largest cities in the world by land area, population and density. (n.d.). Retrieved July 20, 2016 from http://www.citymayors.com/statistics/largest-cities-density-125.html
Honda Fit. (n.d.). Retrieved July 20, 2016 from http://www.caranddriver.com/honda/fit
