Imports taking up the slack in fleet sales
OK, this seems like a no-brainer. As GM and Ford have gradually pulled back from the low-margin fleet sales market, import fleet sales have surged. After all, somebody has to keep the rental car lots filled. It's mostly been the mainline Asian automakers that have stepped in to fill the void. Toyota, Nissan, Mazda and Kia have all increased their corporate sales of cars and trucks, but they still remain bit players overall. About 11 percent of U.S. import brand sales are to fleets so far this year. That is up from just 8% last year. In comparison, the domestics sell 31 percent of their overall production to corporate customers. Although some fleet sales can be quite lucrative, the vast majority of rental car sales are end-of-year surplus that is heavily discounted to move.
[Source: Automotive News - sub. req.]
Reader Comments (Page 1 of 1)
CARLOS 6:10PM (7/23/2007)
Even if its a slim margin why would US automakers back out of fleet sales? Sounds like easy money.
Is it the warranty cost or the potential negative image of being associated with rentals?
Chrysler should be looking to fleet sales as a way out of all those 06s still on the lot.
Reply
steve.ricken 6:52PM (7/23/2007)
Fleet sales mean that a lot more domestic cars hit the market and get put into used car lots - rentals usually last a LOT shorter than when average people buy cars. This decreases the used car resale value - notice how a chevy malibu is worth nothing after it drives off the lot, but a honda accord will hold its value for much longer.
The idea of domestics leaving fleet sales to a minimum allows resale value to increase and overall appeal for a domestic to increase.
Paul Y 6:24PM (7/23/2007)
Of course Japanese brands are taking up the slack -- obviously, the demand for fleet vehicles isn't drying up.
Reply
Bob-omb 6:56PM (7/23/2007)
Wouldn't it be nice if rental companies had all sorts of cars, and then no one's resale values were affected?
Of course it was kinda nice knowing that 90% of the used Tauruses on dealer lots were former rentals. At least you knew what to avoid without having to pay for a Carfax report.
Reply
Biff Baxter 7:08PM (7/23/2007)
Domestics sell to renters = Bad
Asians sell to renters = Understandable, even laudable
Auto Pundits = Silent
- "Cue the choir, release the doves" -
Reply
vettes2 7:18PM (7/23/2007)
More power to them! The big 3 make one mistake after another and give up market share thinking nothing of it. If you rent a foreign car, just never leave anything in it!
Especially in CA. If you own one, disconnect the trunk key mechanism so it only opens from inside. Rent American is what the police told me after the 2nd break-in in a week. We caught the second guy. Rent car agency didn't even ask if there was any damage. They know!
Reply
Ligor 7:33PM (7/23/2007)
well, someone has to pick them up
and as mentioned above, if all companies gave equally to rental fleets, than no one would have the advantage of 'the car holding it's price' because it sells less to rentals.
sort of levels that plainfield, and so they'll hold their price on merit.
Reply
Carlos 8:35PM (7/23/2007)
If I were an automaker, I'd only sell high-trim level examples to fleets. As advertisements.
You'd rent a stripper Caliber one day and a loaded Elantra the next... and you'd notice how much nicer that Elantra is. I think it'd work.
Reply
Aaron 11:33PM (7/23/2007)
Biff Baxter -
110% spot on. Domestics are lambasted for it, and now that the tide in part is changing the guns fall silent.
Couple this with the fact that no differentiation seems to be made between daily rentals and other fleet sales and you get the usual skewed perspective.
Example - "fleet" sales of trucks to hundreds, if not thousands of businesses (in units of tens if not hundreds of thousands). For example, my relatively small division bought 250 super duty fords last year. These "fleet" sales are not negative, and will always be there for the big 2.5 - especially the likes of ford.
Like in Europe where over 50% of some of our euro brands sales go to fleet sales - I would bet the & of japanese brands at home going to fleet are significant if not substantial.
Reply
tbirdkatz 12:11AM (7/24/2007)
I'd rather have a Camry or Altima over a Malibu or Sebring anyday. I'd also prefer a Maxima to a Taurus. Call me crazy but a stripper Altima is much more entertaining than a stripper Sebring.
Reply
h8rain 10:12AM (7/24/2007)
Sorry can't help it......
Wow, I have heard of strippers being named after luxury cars, but I wonder what a stripper named Taurus would look like......AHHHHHHH!!!!!!!!!!!
I do agree with you though, The foreign base cars seem to be nicer and have more features.
Richard Warren 10:10AM (7/24/2007)
Told you, months ago. Fleet sales are legitimate sales and all the whining about reduced value is just that whining. Someone was going to fill the hole, as the article states, guess who?
What a lot of posters (posers) here leave out of the equation is buying power of a manufacturer if they hold the title of largest (regardless of how they get there) this affects pricing at retail, fleet and at build time.
So, when will the whining start about the diluted value of your vanilla appliance Toyota?
Time to get back in the game Detroit.
Reply