The Big 2.5’s Fleet Sales Fiasco

Maybe it’s just the native Detroiter in me, but I found this at The Truth About Cars interesting:

From September 2006 to February 2007, Chrysler (division) offloaded 48.5 percent of its total sales to the fleets, while 32.1 percent of The Dodge Boys’ sales went to the same market. And even though GM overall has cut back on fleet sales, 44.9 percent of Pontiac’s and 29.6 percent of Chevrolet’s total sales ended up in fleets. Ford (the division) off-loaded fully one-third of their total sales to the fleets, with half of that number going to rental companies.

The problem with this business model is that all these sales to fleets (Hertz, Avis, etc.) put a lot of used cars on the market quickly:

With this many vehicles still flowing into the fleet market, destined to reemerge at auctions, Chrysler, Pontiac, Chevrolet and Ford will have a tough time convincing retail customers to pay full whack for vehicles facing epic depreciation.

2 thoughts on “The Big 2.5’s Fleet Sales Fiasco”

  1. i don’t agree with their assessment regarding depreciation.

    as anyone who’s ever rented a car knows, there are used and then there are USED cars.

    “don’t worry, it’s a rental” is a common meme in many comedies for a reason.

    i don’t know of anyone who ever considers a used rental car to be potentially on par with a private vehicle.

  2. It seems to me Jeff, for example, that the fact that 45% of all Pontiacs were sold by GM at wholesale prices to fleet owners has to depreciate the resale value of all used Pontiacs regardless of condition.

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