• Oct 12, 2010
Third quarter automotive sales figures were the best the industry has seen in just over a year. How are the automakers managing such numbers in light of a puffed-up 2009 third quarter filled with C4C transactions? Fleet sales.

According to Automotive News, during the third quarter of 2010, General Motors, Ford, Kia, Hyundai, Toyota, Chrysler and Nissan combined to sell nearly 2.3 million vehicles. That total is the result of over 1.8 million retail sales and over 450,000 fleet sales. The problem is that the retail figure is actually down four percent from the prior year whereas fleet volume is up 24 percent. Combined, the overall number is up one percent compared with total sales for the third quarter of 2009.

Every one of those previously mentioned automakers, with the exception of GM, Hyundai and Kia, saw a dramatic rise in fleet sales for Q3 2010. In fact, Nissan was up 557 percent; having sold 972 fleet vehicles last year and then 6,384 this year. In Chrysler's case, the Auburn Hills automaker was previously quoted as gunning for a year-end fleet mix of 25 percent, but it's currently running at 39 percent with 39,474 units for September versus 24,070 at this time last year.Even with that sizeable increase in vehicles sold, Chrysler sold far fewer vehicles in 2009, so its fleet percentage remains the same.

[Source: Automotive News – sub. req. I Image: Chris Hondros/Getty]


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  • 23 Comments
      • 4 Years Ago
      A sale is a sale.
      • 4 Years Ago
      Those selfish fleet operators, STEALING cars from our struggling automakers!

      Huh? They pay for the cars? And those sales help keep auto factories running? Oops, my bad.
      • 4 Years Ago
      Captain Obvious strikes again!
        • 4 Years Ago
        Exactly. Economy is still poor, so who can afford a new car at retail?

        New retail sales won't pick up until unemployment drops to a more reasonable level.
        • 4 Years Ago
        BTW, Jeff, that wasn't a slight against you. Just against the other reporting you're reporting on that confirms what we all knew to be quite obvious.
      • 4 Years Ago
      There is a misconception about fleet sales = "bad".

      Fleet can be very profitable to businesses and government as well for automakers.

      Besides, there has been pent up demand from businesses and increased fleet sales should be seen as a good thing in this case, not bad, becasue businesses are rebounding and ordering cars.

      Thanks for making a non-issue into an issue Autoblog. You youngsters need to get John McElroy posting here more often to set these issues straight.
        • 4 Years Ago
        "a positive rental experience can translate to future sales."

        Those PT Cruisers I rented from Hertz really made me want to buy a Chrysler product. Or something like that.
        • 4 Years Ago
        Very true - fleet sales to govt. or businesses is not a bad thing at all.

        In Germany, Mercedes, BMW, Audi and VW have significant fleet sales percentages (after all, there's a reason why the E Class is one of the most common vehicles used for taxi cabs); same w/ Toyota, Nissan, etc. in Japan.

        Also, for lesser known brands w/ good products, it isn't necessarily a bad thing to have their lineup included in rental fleets (w/in a reasonable %), since a positive rental experience can translate to future sales.
      • 4 Years Ago
      I would be curious to see where Honda falls in fleet sales. Lately I have seen quite a few more Honda's to choose from when I need car. Not that it's bad because I am quite fond of Honda's but still makes me curious.

      Too bad that will never happen though since Honda doesn't count fleet sales as "fleet" but rather counts them as a "retail" sale just as if Joe Blow bought one.
      • 4 Years Ago
      Not only has Nissan dramatically increased fleet sales for 2010, but they have also (along w/ Toyota and Honda) increased incentive spending in order to move cars off the lots.

      Hyundai and Kia not only have decreased fleet sales, but also have drastically reduced incentive spending (Hyundai's incentive spending YTD is roughly $300 less than Toyota or Honda and $1,100 less than Nissan).

      Ford and Chevy have seen a slight uptick in incentive spending for the year, but Dodge has seen a sharp decrease (albeit still above the industry avg.).
      • 4 Years Ago
      Fleet sales have always been a big component of auto sales, especially for the "Big 3". For these statistics, sales = sales, whether to individuals or fleets. Is the increase in fleet sales worrisome? Or is that a sign that the economy is moving up and rental companies are willing to invest in new vehicles again? We already know most people are keeping their current rides longer and buying new less often.
        • 4 Years Ago
        Worn out vehicles need replacement, a simple reality of high use, or more importantly, increased wear and tear from escalating use. That last event is an indication of a slowly awakening economy, and that's a good thing.
        • 4 Years Ago
        If it helps an automaker spread out the fixed costs of a model's production (tooling, factory space, training, etc...), I don't think fleet sales are an inherently bad thing. If you're dumping 80% of a model's sales on rental fleets, obviously resale value will blow for retail customers, but a reasonable fraction is fine.
        • 4 Years Ago
        While automakers welcome sales of all kinds (individuals, private and public fleets), fleet sales tend to have lower profit margins (if any profit at all) due to their lower-content nature and single purpose nature (rentals, hauling people or cargo, etc.).

        Individual sales tend to include higher profit options and packages, such as navigation, rear-seat DVD, leather, etc. Also, individuals will go with the best and easiest financing options available, which can include going with a finance arm of the automaker. With that, they can recoup some extra money through interest, fees, etc. Corporate fleet buyers will usually pay through terms or finance it on their own.
      • 4 Years Ago
      Chrysler is at 39%!? Is that a typo??? Good laaawd!

      So much for resale value for those Chrysler vehicles being sold...
      • 4 Years Ago
      Okay, now things are starting to make more sense.

      Because i don't see many other indicators that our economy is improving... other than slightly less jobs shed per month.. and this whole 'auto sales are picking up' talk.
        • 4 Years Ago
        Creation of private sector jobs has gone up for like 9 months straight.
        And when the administration changed hands we were shedding like 600 or 700k jobs per month.
        That is more than just a little different.

        Is the economy great?
        No.
        It is a whole hell of a lot better than it was two years ago?
        Damned straight it is.
      • 4 Years Ago
      Artificial is a loaded term.

      I'm sure a large portion of the sales are fleet sales though. They always are.
      • 4 Years Ago
      what is this logic with fleet sales?? damn if you do and damn if you don't....
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