DETROIT — After slashing U.S. sales of daily rental vehicles by nearly one-third in 2007, Ford Motor Co. plans to trim those sales by an additional 10 percent in 2008.
"Last year we took a meat cleaver to it," Ford sales analyst George Pipas told Automotive News. "We will be shaving some more sales in 2008."
The 2008 cuts will be concentrated in the first half of the year, Pipas said. Ford trimmed daily rental units by 5 percent in January and about 20 percent in February. More reductions are planned through June, with a small decline likely in April, he said.
Ford is cutting daily rental sales as part of CEO Alan Mulally's turnaround strategy to better match production levels with demand. Some daily rental sales can be healthy, but Ford had sold too many units of several vehicles to rental fleets to keep its factories running. That hurt profits and resale values.
For example, the prior-generation Ford Taurus went almost exclusively to fleets by 2005 and 2006. So Ford closed the Atlanta plant that assembled the Taurus in late 2006 and discontinued the model. The end of that Taurus was the major contributor to last year's fleet decline.
The 2008 fleet reduction will be more spread among nameplates. By midyear, Ford will be at its long-term desirable level of daily rental sales, Pipas said. During the second half of 2008, some months are likely to show increases in daily rental sales.
Although Ford is cutting daily rental sales, it still values the exposure that rental fleets can give to new vehicles. The 2009 Ford Flex crossover is a good candidate for putting into rental fleets when it goes on sale this summer.
Said Pipas: "That might be something we'd like to have waiting at an airport for a family about to go on vacation."