Import fleet sales on the rise
Toyota, Nissan, Mazda and Kia have generated significant sales of cars and trucks to corporate customers, although their sales do not match those of the Detroit 3 automakers.
Through May, fleet customers account for roughly 11 percent of the import brands' total U.S. sales, according to an estimate by the Automotive News Data Center. That's up from less than 8 percent a year earlier.
By contrast, fleet customers account for about 31 percent of the Detroit 3's total sales, down slightly from 32 percent a year earlier. The Detroit 3 still dominate U.S. fleet sales. But as Ford and General Motors cut back, some import brands are stepping up.
That strategy "speaks to the pressure (imports) are under to meet sales targets in a competitive market," says Jeremy Anwyl, CEO of automotive consumer Web site www.Edmunds.com.
The fleet sales data are estimates derived from a comparison of overall sales for the period to retail registration data obtained from R.L. Polk & Co. of suburban Detroit. Fleet sales are defined as transactions in which the buyer purchases 10 or more vehicles at a time.
Sales to corporate fleets such as Wal-Mart or the post office can be profitable. But vehicles sold to daily rental fleets such as Hertz or Avis are sometimes discounted heavily - especially if an automaker is trying to unload vehicles that it can't sell to retail customers.
'They need cars'
Kia is selling more vehicles to daily rental fleets, says Ian Beavis, marketing vice president of Kia Motors America Inc. Overall fleet sales accounted for nearly one-fourth of Kia's U.S. sales in the first five months of 2007, up from less than one-fifth a year earlier.
A service loaner program Kia launched last year with Enterprise Rent-A-Car has boosted fleet sales, Beavis says.
But he adds that Kia is not offering huge discounts. "The daily rental fleet business has been good and they need cars," he says. "The rental companies are approaching us."
Kia's fleet sales will represent 17 percent of its total U.S. sales this year, Beavis predicts.
Several other import brands say they filled unusually large fleet orders early this year. For example, fleet sales accounted for 24 percent of Mazda's total sales through May, according to the Automotive News Data Center. That's up from 18 percent a year ago.
Mazda spokesman Jeremy Barnes predicts fleet sales will level off. "Fleets were a little over 12 percent of our volume for our last fiscal year," Barnes says. "We expect to come in that way for this year."
Toyota takes off
Among Japanese automakers, Honda has taken a just-say-no attitude. Honda does not sell directly to fleet customers, company spokesman Chris Martin says, but some of its dealers have fleet customers.
Toyota and Nissan have been more willing to cultivate fleet customers. According to Automotive News Data Center estimates, Toyota division's fleet sales were about 11 percent of the brand's total U.S. sales, up from 7 percent a year earlier.
Last week, Toyota spokesman Xavier Dominicis confirmed that Toyota's fleet sales have increased. But he says those sales remain less than 10 percent of total sales.
Rising fleet sales are in line with Toyota's overall sales growth, Dominicis says. But he insists that fleet business "is not and has never been a way for Toyota to meet sales targets."
Nissan division's estimated fleet sales rose from 9 percent in the first five months of last year to 15 percent in the same period of this year.
According to Nissan, the introduction of Nissan's redesigned Altima sedan last fall triggered large fleet orders early this year. The company has said fleet sales will decline over the next six months or so.
Last week, company spokeswoman Jeannine Ginivan said fleet sales will stabilize at 10 percent of Nissan's total volume. "We are not looking to increase fleet sales to supplement retail sales," Ginivan said.
Ford Motor sales analyst George Pipas says he believes import automakers are increasing their daily rental fleet business because the U.S. economy has softened.
The import-brand automakers contacted by Automotive News say they don't intend to prop up overall sales by relying on the fleets. But Anwyl of Edmunds.com remains skeptical. Heavy sales to rental fleets can harm a brand's image and depress the resale value of its vehicles, he warns.
"That damage takes years," Anwyl says. "Whether this will be a long-term trend for the imports that damages those brands remains to be seen."
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