How to raise your U.S. market share in 2016?
It's simple -- you have to turbocharge fleet sales. In fact, that may be the only way in an increasingly competitive market that has hit a plateau after six years of growth.
Sure enough, fleet activity has defined overall sales winners and losers, according to industry sources that track bulk sales to rental companies and commercial and government buyers. Through September, major players with double-digit fleet increases posted net sales gains. Those that cut back or stood pat on fleet lost overall volume.
"Fleet is the lever automakers can pull," said TrueCar analyst Eric Lyman.
Most notably, fleet sales jumped 40 percent at Nissan North America, offsetting a modest retail decline and putting it more than 60,000 units ahead of the same period in 2015. The group's 5.4 percent sales gain through September was No. 1 among the top seven groups.
Fiat Chrysler grew U.S. fleet volume by 95,300 units this year, but with sagging sales at dealerships, overall sales at FCA US were up by just 60,000. Still, that's good for a 3.6 percent sales gain. And both FCA US and Nissan North America have added 0.4 points in market share this year, tops in the industry.
A 15 percent fleet bump pushed Hyundai-Kia net sales up 25,300 units, a gain of 2.4 percent. Ford Motor's 10 percent fleet increase netted an 11,800 sales gain, up 0.6 percent. Both would be down for the year without that extra fleet volume.
By contrast, General Motors deliberately slashed fleet volume 19 percent this year to bolster residual values and cut low-margin sales to daily rental operators. GM's retail sales are 14,200 units higher this year, but 101,700 fewer fleet sales left it more than 87,000 units lower overall, a decline of 3.8 percent.
Toyota Motor Sales, which has kept fleet unchanged at 10 percent of its U.S. sales mix this year, is down about 45,000 units overall or 2.4 percent.
Excluding American Honda, which lets dealers handle fleet transactions estimated at 2 percent of its sales mix, the other six major automakers collectively boosted fleet volume by 142,800 units while retail declined 113,300 units through nine months, a net increase of 29,500. That's in line with an overall U.S. market running a scant 0.3 percent higher than the same period in 2015.
The big fleet surges by Nissan, FCA, Hyundai-Kia and Ford and GM's sharp cutback are a stark departure from 2015. GM's decision to reduce sales to daily rental fleets sharply started in early 2015.
Nissan has moved aggressively into the commercial fleet niche by both introducing dedicated commercial vehicles and creating a commercial division this year that, among other things, is targeting contractors with basic single-cab gasoline engine versions of its new Titan full-size pickup. Since 2014, Nissan has increased its fleet mix to 21 percent from 14 percent.
"Our commercial fleet business is up 50 percent this year [after 9 months]. That's more NV and Frontier, and the new Titan has been very good for us," said Judy Wheeler, head of sales for Nissan Division. "Diesel or gas engine, we haven't in the past played very much in that [fleet] space, but now we are working with our dealers to go for the smaller contractors.
"It's part of our business that we see as a positive," she said.
Ford has traditionally dominated the commercial fleet segment, including building cab-chassis units for coachbuilders that make specialized bodies from concrete mixers to fire trucks. After a year of boosting fleet -- the fleet mix is 31 percent through September compared with 28 percent in 2015.
Car-heavy Hyundai-Kia competes a bit with sedans and hybrids in the commercial and governmental segments but sells heavily to daily rental agencies. Fleet is running at 21 percent of its total sales, up from 19 percent in calendar 2015.