The players are changing in the fleet business, especially in sales to daily rental companies. As General Motors, Ford and Hyundai-Kia back off, others are rushing in.
For Nissan, Chrysler and Volkswagen, fleet is an integrated part of aggressive growth strategies, with Nissan even pushing dealers into local-level fleet deals -- so-called "fleet-tail." For Mazda and others, fleet is a lifeline to relieve bloated inventories.
Fleet is the stepchild of the auto industry. Few automakers discuss their participation, but almost everyone sells to fleet customers. Most years it's a fifth of U.S. light-vehicle sales, according to Edmunds.com, TrueCar.com and the Automotive News Data Center. Edmunds.com put 2011 fleet sales at 2.5 million units.
Perhaps because public sales data are so spotty and definitions of fleet business are so fuzzy, the fleet business -- especially the portion involving daily rental fleets -- has many critics. Dealers say daily rental fleet sales damage a brand's resale values. Financial analysts see it as an unprofitable dumping ground.
Not so, says Kevin Koswick, fleet boss at Ford Motor Co. "The fleet business is a profitable business" for Ford, he said in a recent interview. "All of it is profitable."
Ford and GM dominate the commercial and government sectors, which Ford said in 2011 was 39 percent of total fleet business. Commercial is mostly pickups and other trucks, and government sales are largely police cars. Ford and GM, and to a lesser extent Chrysler and Toyota Motor Sales, have the products to compete in those sectors, Koswick said.
"Everybody wants a fleet business, but not everybody can do it," he said. "Many automakers don't have the full product range, and few have the staff and expertise to run it well."
But the biggest chunk of fleet, the 61 percent of sales to daily rental companies, is drawing more import-brand competition in recent years, Koswick said.
In the first four months of 2012, the total fleet mix has jumped for Toyota, Mazda, Nissan and Volkswagen brands compared with 2011 levels, TrueCar.com says, and is flat or falling for Ford, Chevrolet, Dodge, Hyundai and Kia.
Nissan North America is a prime example of a company using fleet in an aggressive push to boost total U.S. sales. The past 16 months, fleet has grown even faster than retail. The fleet mix this year is 23 percent, up from 13 percent for all of 2010, according to the Automotive News Data Center.
"Nissan sees weakness at Honda and Hyundai-Kia limited by capacity and feels this is a real opportunity to recoup some market share," said one Nissan dealer. "So it's pushing both retail and fleet."
Starting in early 2011, Nissan also encouraged "fleet-tail" by dealers, changing policies to let dealers sell multiple units to daily rental fleets and letting its retailers count those deals as retail units that qualify toward monthly stair-step bonus programs, said a Southeastern Nissan dealer who asked not to be identified.