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.]