Kia's fleet sales are up sharply this year, from 16.8 percent in the first nine months of 2006 to 21.1 percent in the same period this year. The percentages are calculated using retail registrations obtained from R.L. Polk & Co.
Polk recorded retail registrations of 184,592 from January through September of 2006. Kia reported total sales of 221,998 for the same period, meaning 16.8 percent of the sales were fleet or otherwise.
For the first nine months of 2007, Polk recorded 183,089 retail sales compared with Kia's total sales of 232,043, or 21.1 percent nonretail.
So far, the higher fleet percentage isn't causing any problems," says Benny Yount, owner of Paramount Kia in Hickory, N.C.
"We've been the beneficiary of the fleet sales because there has been increased awareness and increased sales," says Yount, who recently ended a term as chairman of Kia's national dealer council.
But he adds: "It's a fine line to make sure that dealers have enough inventory, particularly on the popular vehicles like Rio and Spectra."
John Blair, CEO of Automotive Lease Guide in Santa Barbara, Calif., says Kia's fleet strategy makes sense.
"For Kia, getting people in their cars, however they do it, is probably a good thing," he says. "But if fleet becomes a significant factor of overall sales, it will have a negative effect on residuals."
Automotive Lease Guide tracks used-car residuals for all brands. Blair says the average three-year residual for all brands is 35 percent of the original sale price. He says that is below average.
While Kia has improved, he says "It is still among the lowest in the industry."
Kia has not set a volume target for its commercial fleet program.
Says Hunt: "We want to make sure the money is right on all of the fleet business."