The Detroit 3 are smart to cut sales to fleets

The retail automotive market in the United States is still in the doldrums. But give credit to the Detroit 3 for reducing the number of light vehicles they are selling to daily rental companies and corporate fleets. Such discipline may be painful now, but it will pay off later.

Usually in a down market, automakers wrestle with the temptation to shovel more vehicles at their fleet customers. Fleet sales to corporate customers may be profitable, but sales to daily rental fleets usually aren't. They keep the factories humming but can damage a brand's residual values when retired rental units turn up at auction, often in the same model year.

Not this time. Through the first four months of the year, General Motors, Ford Motor Co. and Chrysler LLC reduced U.S. sales to fleet buyers.

The problem hasn't been eliminated completely. With retail sales in the tank, fleet sales still account for as much as 35 percent of total U.S. sales by Chrysler LLC and Ford Motor. But the discipline demonstrated by the Detroit 3 is an encouraging start.

The best way to reduce the percentage of sales to fleets is to sell more cars and trucks at higher prices at retail. That ought to be a little easier to do when the market bounces back, thanks to the steps GM, Ford and Chrysler are taking now.



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