Nissan is looking for more fleet business

NEW YORK -- Nissan wants to sell more of its vehicles into fleets in the U.S. -- but not in the way its chief competitor recently accused it of operating.

Nissan is looking for new opportunities in profitable commercial fleets, not daily rental fleets, said Jose Munoz, chairman of Nissan North America.

Munoz defended Nissan's strategy during this month's New York auto show, in response to public criticism from John Mendel, executive vice president of American Honda Motor Co. Mendel charged that Nissan's rising U.S. sales volumes came from pushing more vehicles into rental fleets.

In the first quarter, Nissan brand's sales rose 3.1 percent to 333,786 vehicles, while Honda brand sales rose 2.4 percent to 294,299. U.S. new light-vehicle sales rose 5.6 percent.

Munoz noted that Nissan's overall fleet business declined 17 percent in March from a year earlier and 3.6 percent in the first quarter of this year from the year-earlier quarter.

"Of course, we need to be active in fleet," Munoz said during the New York show. "In fleet, you have a lot of subsegments. You have the rental, which is not very profitable. And then you have the commercial fleet, which is where we are focusing."

Munoz said Nissan's commercial fleet sales have grown 60 percent so far this year, even as its daily fleet sales have declined.

Daily rental fleet sales to companies such as Hertz and Enterprise are traditionally conducted directly by automakers. In contrast, the commercial fleet business is handled by dealers and caters to businesses that purchase multiple vehicles at the same time. Nissan said the segment has been profitable for its retailers and has helped increase brand awareness among business owners.

In the past few years, Nissan has positioned itself for more commercial business in the U.S. In early 2013, it introduced the NV200, a compact van that is marketed as a delivery vehicle and for small business applications.

Later this month, the company will also relaunch dealer-to-customer fleet sales of its NV200 taxicab in New York, where it was awarded an exclusive contract to supply all the gasoline-powered taxis in the city for a decade.

Nissan also has encouraged its dealers to create their own on-site rental companies in recent years. Although those vehicle inventories are relatively small, the in-house rental operations allow dealers to keep service customers in Nissan-brand vehicles while their cars are being worked on, rather than sending customers to Enterprise or other third-party rental agencies.

The spat over fleet sales comes as the segment is rising for the entire industry. Daily rental fleet sales rise and fall depending on the buying demand of the major auto rental chains.

But overall fleet sales are up 10 percent for the first three months of this year, led primarily by increased transactions by Toyota, the Hyundai/Kia group and General Motors, according to the Automotive News Data Center.

Munoz said that Nissan's own fleet-retail sales mix will likely remain constant over time. But he emphasized that it is not the reason Nissan's U.S. sales volume has been increasing.

"I wouldn't say fleet is the driver," he said. "We've grown, by far, more on retail than on fleet."