Autofield Blog

The Fleet Is In--& We Don’t Mean the Navy


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12. October 2010

A few years ago, an auto sales executive responded to criticism of the high level of fleet business that his corporation had by saying, “It all spends the same.” After all: Money for a product is better than having massive parking lots full of unsold vehicles, right?

Last week, an auto [non-sales] executive, in light of the September sales numbers, asked me why no one was reporting on the high level of fleet sales that some of the vehicle manufacturers had in their mix. And he showed me some numbers that were certainly eye-opening—and then quickly put away the piece of paper, indicating that it was information that was off the record.

Well, Automotive News has answered his question with a piece titled “Fleets are fueling the sales rise” by Jesse Snyder. And the numbers for the vehicles that are being sold to rental firms, corporations, and government agencies—and not at the same retail pricing that you and I deal with (of course, we’re not buying cars in Costco quantities)—is, well, impressive.

According to the story, of the 2,290,177 vehicles sold by GM, Ford, Toyota, Chrysler, Nissan, and Hyundai-Kia in September 2010, 1,828,391 were retail units and the remainder (461,786) were fleet sales. Compared to September 2009—and remember that was still Cash for Clunkers—retail sales were down 4% but fleet sales were up by 24%.

young-disraeli

And, of course, some companies’ retail sales are down more than others, so that when someone looks at the overall monthly results, there are numbers and there are numbers, or, as the quote attributed to Disraeli has it, “lies, damn lies and statistics.” This is not to say that there are necessarily inaccuracies in the numbers, just that things aren’t necessarily what they seem.

Look at it this way. Say you buy a brand new Zinger. And let’s say that unbeknownst to you at the time of your purchase, a rental agency, a corporation, and a municipality all buy Zingers, as well. What this means is that the value of your Zinger when you go to trade it in for a Zinger Mark II is going to be significantly less because of those fleet sales. However, if the Zinger manufacturer didn’t have those sales, there is the probability that its product development would suffer so the Zinger Mark II wouldn’t be quite as appealing or functional as would be beneficial for you, so those fleet sales actually had benefit.

Said another way for all concerned: Damned if you do; damned if you don’t.                  © Queens’ University

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