• 21
For the domestic automakers, 2007 was supposed to be the year that they weaned themselves off the fleet sales teat. For GM, they've been doing pretty well, limiting their offloads of 10 or more vehicles to one company to around 24-percent of total sales. Chrysler and Ford, on the other hand, are still relying on the practice, coming in at 36-percent and 34-percent respectively – the highest of any automakers.

While this keeps overall sales up, it's a proven fact that it increases depreciation and limits profits.

Ford's diet began with reducing fleet sales by 67,000 units to rental agencies, when compared to the first five months of 2006, with the intention of scrapping another 67k by the end of 2007. For the Blue Oval Boys, that's a lot of revenue – even the small amount garnered from fleets – and with sales in decline, it's a tough pill to swallow.

Chrysler-branded vehicles account for 47-percent of the automaker's sales, while Dodge comes in at 37-percent and Jeep lets go of 20-percent of their vehicles to rental agencies. According to a statement issued to Automotive News, the intention is to reduce fleet sales at Chrysler to 21-percent of its total by 2009.

Who's going to fill the fleet niche then? Nissan, Mazda, Kia and Hyundai are going strong, but all these automakers are well aware of the perils of overindulgence at the fleet sales trough, and they have no plans to follow in the domestic's footsteps.

[Source: Automotive News – Sub. Req.]


I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.


    • 1 Second Ago
  • 21 Comments
      • 7 Years Ago
      If GM,F,Chrysler would offer Fleet only car (Plymouth, Oldsmobile ford would have come w/nameplate) and not build low end cars this should solve depreciation.Those looking for a bargain car will have to wait for fleets to get new models.
      • 7 Years Ago
      Makes obviosu sense to me. The simple act of having GM / Ford bail on the minivans and taurus will create enough of a vaccuum for chryserl to bump their stake up. Until their new minivans show up, the Pt cruiser dies and the mid sized offerings get the motors / trannys / designs they need then in my view, keep dumping.

      An interesting notion on international fleet sales as reported here lmao..

      http://sphanish.autoblog.com/2007/04/12/fleet-sales-also-an-issue-abroad/

      Audi and BMW "have the fewest private customers of all brands in Germany," with just 33.5% and 32.8% respectively. Mercedes was least likely to send a vehicle to Deutsch Hertz, with 50.1% going to private owners.

      do the math, 60+ and 50% fleet sales.

      lol
        • 7 Years Ago
        Don't know about Ford, but GM did the right thing bailing out of the mommy-wagon market. Since the had the OutlookArcadiaEnclave people movers coming.
      • 7 Years Ago
      Steve B, I'm a military guy, (13 years and counting) almost all of the vehicles we have on this base aren't stripper models. Base Police drive last generation Tahoes, Commanding Officers have either the Stratus or Sebring, duty vehicles are Dodge Caravans, and trucks are usually GM twins or F-series. All have power windows, door locks, seats except the trucks.
      • 7 Years Ago
      Why is selling fleet cars such a bad thing? I understand margins are very low, but somebody has to sell fleet vehicles, don't they?
        • 7 Years Ago
        The margins are worse than low. Rental cars are usually decontented. "meaning, they don't have crap in them" the value and sport packages do help the bottom line. Also bulk buyers alyways fight for big discounts. Big discounts on nothing leaves you in the red.
        • 7 Years Ago
        The downside to fleet sales is that in a few years the fleet is usually sold off at cheap prices.
        If the automakers do not steeply discount the fleet sales though, I could see that changing. If Hertz had to pay MSRP for its cars, I doubt they would be sold off as cheaply later...
        • 7 Years Ago
        Yeah, but somebody desperate. Why sell for a small profit when you make more selling to the average consumer? When your supply is greater than the demand. Hence, the negativity in resale value.
      • 7 Years Ago
      If it helps their bottom line, let them sell to Fleets.

      In their home countries, the Germans and Japanese sell plenty of vehicles to fleets.
        • 7 Years Ago
        IIRC, more than 35% of BMW and Mercedes sales are to fleets in Europe.
      • 7 Years Ago
      I say it's the military. Almost every base is filled with stripped (manual doorlocks, manual windows, etc) Dodge Grand Caravans and Stratuses, and Chevy Malibus and Impalas, used as staff cars for official duties.
      • 7 Years Ago
      someone please photochop the chrysler sebring to see if the car can look better, just curious.
        • 7 Years Ago
        Follow the link provided by #3. This car couls be really "hot".
      • 7 Years Ago
      You could always look at the bright side. Fleet sales may depreciate vehicles quickly, but to you as a consumer this could be seen as a good thing. Nothing like sailing in and snatching up a Ford Taurus, that 10 months earlier may have been $18,500 and is now $9500 with only 22k miles. It makes for affordable and relatively dependable used cars.
      • 7 Years Ago
      I was just in Hawaii, and I couldn't believe how many Calibers were rental cars -- they were *everywhere*. A fair amount of Sebrings, too, and the rental van of choice was the Hyundai Entourage. Strange!
      • 7 Years Ago
      Wasn't the Sebring designed to be a rental car in the first place. Wouldn't want that god-awful thing parked in my driveway.

      Really, I would be curious to know what percentage of the Sebring shown above is fleet sales and what percentage is private sales?

      I don't get the designers at Chrysler. They went waaaay overboard with styling cues on the Sebring, and the Avenger looks as if they just ran out of time.

      Tone the Sebring down, and someone please finish the Avenger.
    • Load More Comments
    Advertisement
    2015 Ford Mustang
    MSRP: $23,800 - $46,170
    2015 Jeep Cherokee
    MSRP: $22,995 - $30,795
    2015 Subaru Forester
    MSRP: $22,195 - $33,095
    2015 Honda Accord
    MSRP: $22,105 - $33,630
    2015 Toyota Highlander
    MSRP: $29,665 - $44,040
    Advertisement