Nearly half of Chrysler's products go to fleets, Pontiac isn't doing much better
What did Chrysler do with its highly publicized production glut? Unloaded them onto fleets. Between September and February, 48.5-percent of Chrysler's sales were sold in quantities of ten or more. Even more troubling to dealers and consumers, close to 80-percent were bought up by rental car companies, versus GM and Ford whose rental sales are closer to half of their total fleet sales.
Mainly comprised of Chrysler minivans and the ubiquitous Sebring, DCX's fleet sales accounted for 34.3-percent of total sales, closer in line with FoMoCo at 32.8-percent and the General at 26.6-percent.
But the trouble isn't just at Chrysler. During that same period, Pontiac fleet sales just skimmed the halfway mark at 44.9-percent. A tough blow, as General Motors has been doing it damnedest to limit fleet sales throughout its line up. Thankfully, it's dropping – down to 31-percent for February – but Pontiac's retail registrations aren't what they used to be this time last year.
With the introduction of the new Sebring convertible and the new Malibu, both DaimlerChrysler and General Motors are looking to limit future bulk sales. Whether either automaker's bottom line can handle it remains to be seen, but in order to keep resale values from skimming the bottom of the retail ocean, neither has a choice.
[Source: Automotive News – Sub. Req. – Chrysler article, Pontiac article]
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Reader Comments (Page 1 of 2)
Petey 7:48AM (4/23/2007)
Unacceptable! This means my next business rental will most likely be a Sebring... ughh.
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Chris 7:57AM (4/23/2007)
I'll take a craptastic Aveo please... I already own a Cobalt :(
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LaughingTooHard 7:57AM (4/23/2007)
I am not totally sure why this is such a problem, we DO have computers now...
Fleet car sales can be tagged by the DMV permanently. End of story. That way they do no effect consumer resale value..
Or if that is too much programming for the whiners out there / they are worried the fleet cars will be stigmatized by the being labeled “Used and Abused”, all companies who sell cars in the US are REQUIRED BY LAW to put aside up to 15% of their yearly car sales for fleet purchases. No more under any circumstances.
That way all the makers will have that same negative aspects of doing business hanging over their head. And we can see how well a Hyundai or Toyota hold up to an Avis/Hertz/Enterprise abuser, sorry - renter. After a while I think people will see cars are pretty much all the same and maybe iron blocks and pushrods are so bad when maintenance is ignored. Me? I will just be pissed when they only have imports left when I DO go to rent a car.
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ron 9:46AM (4/23/2007)
I seem to remember back in the early 90's when Chrysler launched their new Concorde/Intrepid/Eagle cars by giving them to the rental companies before they were available for sale to the public. We were on vacation in Florida and rented an Intrepid. It gave us 2-weeks exposure to a new car from a company that I typically wouldn't walk across the street to look at. I thought it was a great idea.
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AMcA 9:30AM (4/23/2007)
Before anybody starts on the fleet-sales-mean-doom rif again, let's remember: BMW, Mercedes and other vaunted brands in Europe have even HIGHER rates of fleet sales. Over 50% according to something I read recently.
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Chet 10:22AM (4/23/2007)
Fleet sales may not be as desirable as retail sales, but they're better than no-sales.
How do Chrysler, GM, and Ford expect to limit fleet sales? Are they going to magically make up the difference in retail sales? (At the expense of Toyota and Honda? Really?)
Fleet sales percentages won't go down until total production goes down. Plant closures and layoffs don't take time to announce, but they do take time to implement... and closures for outsourcing to the Magna-Steyrs of the world don't really count. The Domestics say they're getting there, but they ain't there yet.
Besides, fleets put people in new Chryslers and Pontiacs that might otherwise hold onto old prejudices about past product.
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Mr. Oak 10:55AM (4/23/2007)
Chet: 6. Fleet sales may not be as desirable as retail sales, but they're better than no-sales.
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Not really, fleet buyers buy at such a reduced rate, there is no profit in the cars. Factor in the legacy costs (Not a problem for the imports, YET!!). It makes more sense to them than to domestics.
I would rather see GM/Fords go to tropical hours in the summer time. Rotate additional time off for it's employees. Half days off every other Friday, No night shift on Friday etc. than give the cars away to Hertz, Avis Enterprise etc.
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Guenther 11:30AM (4/23/2007)
#3- that sounds like a terrible idea- terrible like communism. There's only so much room for fleet Porsche's out there.
Since Ford and GM cut their fleet sales, someone had to fill the demand. Hyundai is gladly stepping up. I've had plenty of Hyundai's and Nissan's. Most were fine. some were junk- not from abuse
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c 3:03PM (4/23/2007)
I've heard that toyota is stepping into fleet sales big time,and in canada they are into it already,selling corrolla's ect. dirt cheap to taxi company's,the rental car company's budget real big in canada,thrifty ect. mostly have toyota's,honda's,yes they used to be mostly domestic car's now 90% asian car's with my bussiness dealing's I rent alot of car's and try to drive as many car's as possible and I don't know why they pick on chrysler,the sebring was and never was a crap car,handled,performed,rode better than honda/toyota's ive driven
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mr friggles 6:44PM (4/24/2007)
With any luck some no-name company will come out with a cheap high performance electric (or other non-gas) car, sale it to fleets super-cheap and put GM and Chrysler out of business. Then we can basic in the glory of the death of the gasoline crapocar.
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BOB 4:28PM (4/23/2007)
Hey, I am the one who keeps posting he never sees a Pontiac in LA that is not a rental --- OK, a couple of Sostices, lol.
GM needs to do a lot more than bring in a few hotted-up Holdens with new grilles, to save the brand.
Ford's image is kept up a bit by Mustang, Chrysler by the 300, but Pontiac has nothing going, really, but the Solstice. (which hardly counts, because its buyers are not so likely to buy a Pontiac when they move up.)
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Don 5:05PM (4/23/2007)
I drove a new 2.4-litre Sebring, and while it's not an S-Class, and while it does look cheap on the inside...it's still a good car.
No friggin' worse than a Camry.
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Don 5:06PM (4/23/2007)
And PS--this 80% fleet thing is entirely Chrysler's faultl...building all those cars and storing them in lots. Pfft. Pathetic.
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Brad 7:58PM (4/23/2007)
I would have to agree with #12. That was one of the dumbest things I have ever seen. "Let's see, the dealers aren't ordering any vehicles, Oh well let's just build them anyway and then twist their arms and make them take them." STUPID!!
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Tagg 8:26PM (4/23/2007)
I beleive that, everytime I get a rental some POS Sebring or even worse, a Grand Prix. The Grand Prix has to be the worst car I have ver driven followed closely the Sebring.
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Chet 8:54PM (4/23/2007)
Even if the sale is at low margin (or no margin), it keeps the plants running and the volume up.
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Aaron 11:03PM (4/23/2007)
was it hgere I read that back in europe BMW and AUDI have 60+ percent of their sales go to fleet.
Toyota fleet sales skyrocketing what over 50% in the last few years, and the koreans TRIPLING?
let's not talk about that.
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Mike G 1:14AM (4/24/2007)
Wow, shocker that the new Sebring isn't selling.
Why did they even bother, that thing is craptastic.
I think I'd rather drive a 300 for the same price with no engine and just Flintstone it.
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alex 1:57AM (4/24/2007)
some of you aren't getting it. yes a fleet sale today puts money in your pocket today... but it hurts you in the long run. selling a very high percentage of your cars to rental companies hurts your brand image (think taurus and impala) and lowers the resale value of cars (something people take into account before making a purchase).
So yeah, GM might make a couple less bucks this quarter by reducing fleet sales, but the idea is to increase retail sales in the future by improving brand image and resale value.
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c 2:07PM (4/25/2007)
Did you know that the electric car pollutes more than the gas powered car!!!That's what really happened to the electric car!!And the hybrid car's are extremely dangerous you are sitting on a bomb underneath interior floor space are large tank's highly pressurized,the fire fighter's are trained differently to deal with these car's.
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