Fleets fuel surge at GM, Chrysler
Internal documents show retail sales are down through July
Internal documents obtained by Automotive News show that much of the recovery at the two companies comes from sales to daily rental fleets.
The data show retail sales were down less than 1 percent at GM and off 19 percent at Chrysler through July.
By comparison, Ford Motor Co. had fewer sales to daily rental buyers.
Essentially, GM and Chrysler regained the fleet business they lost during their troubled 2009 trip through banktruptcy.
Counting fleet of all types and retail sales, GM is up 13 percent this year, and Chrysler is up 11 percent. That's close to the industry's 15 percent gain.
But GM fleet sales are up 53 percent to 400,000 units so far this year, internal documents indicate. Chrysler more than doubled fleet volume to 242,000 units.Although he did not comment directly on Chrysler's fleet numbers, CEO Sergio Marchionne admitted recently that he is dependent on fleet sales.
"We all are -- every one of the Big 3, even the imports," he said July 30. "As new models start launching, you'll start seeing an increasing share of retail."
After stumbling badly in 2009, fleet sales soared to about 1.6 million units in the first seven months from fewer than 1 million a year earlier. Daily rental companies, contractors and other fleet operators that deferred vehicle purchases last year are more confident -- or are forced to replace worn-out vehicles.
GM sales Vice President Don Johnson said dealers are telling him that contractors are returning to showrooms.
Having shed Saab, Pontiac, Saturn and Hummer, GM's four surviving brands are up 18 percent retail through July, GM spokesman Tom Henderson said. Automotive News calculates GM's fleet sales rose 50 percent for its four brands this year.
Henderson did not dispute the numbers cited in this story but said that "it is invalid and misleading" to compare GM's current retail sales to a period when it had eight brands and that GM has "gained 1 point of retail market share."
Rebecca Lindland, head of North American auto research at IHS Automotive, said there is pent-up demand in fleet, but not necessarily any on the retail side. "Rental fleets are investing now because they bought very little last year and their vehicles are old," Lindland said.
Through July, GM and Chrysler are taking close to half the industry fleet surge. But others also are boosting fleet sales.
At Ford, fleet volume is up 35 percent, while retail sales are 19 percent higher. Fleet sales were 35 percent of total Ford volume through July, compared with 39 percent for Chrysler and 31 percent for GM.
George Pipas, Ford's chief sales analyst, said the automaker cut its July fleet percentage to 25 percent by slashing daily rental fleet volume.
He said Ford is emphasizing commercial and government fleet sales -- generally considered more profitable than sales to daily rental fleets. Sales to daily rental fleets are less than half of Ford's fleet total this year.
By comparison, more than two-thirds of Chrysler and GM fleet volume goes to daily rental fleets.
Through July, 16 percent of Hyundai sales went to fleet buyers, said Dave Zuchowski, the company's U.S. sales boss.
For Nissan, that number was 15 percent; for Toyota, 9 percent. Both figures are estimates compiled from company sources and internal documents.
Automakers traditionally have not broken out retail and fleet totals in monthly U.S. sales reports. But with growing interest from dealers and analysts, Ford and GM have started detailing basic fleet and retail information.
For three months, AutoNation Inc., the largest U.S. dealership group, has included retail sales details in its monthly report.
Manufacturers expect the pace of fleet sales to slow in the second half. Ford, Chrysler and GM say fleet will be a smaller part of their sales mix by year end. Pipas expects fleet volume to be about 30 percent of Ford's sales for the full year. Henderson said GM's full year fleet mix will be 25 to 26 percent, similar to 2009's 25 percent.
Chrysler spokesman Ralph Kisiel said, "For the full year, fleet sales will be roughly 25 percent of our total sales."
Bradford Wernle, Jamie LaReau, Charles Child, Arlena Sawyers, Mark Rechtin, Ryan Beene and David Barkholz contributed to this report
You can reach Jesse Snyder at email@example.com.