Chesbrough said fleet orders have been juiced by changes made as part of the tax overhaul enacted in 2017 that allow businesses to depreciate up to the full cost of a vehicle in its first year. There has been "tremendous activity in fleet year to date," he said.
"We think that there is going to be a bit of a period where the growth of fleet that we've seen thus far isn't going to be able to maintain the strong levels that we've had," Chesbrough said on a call with reporters.
J.D. Power projected that September fleet deliveries rose 4 percent to 236,900. That would make fleet volume 19 percent of total light-vehicle sales, up from 17 percent in September 2018.
With some consumers priced out of the new-vehicle market, automakers have countered the decline in retail demand with higher fleet shipments. Total fleet sales are up 5.8 percent in 2019 through September, Cox Automotive said.
Cox said fleet has made up 17.4 percent of the new-vehicle market in 2019, compared with 16.2 percent in 2018. But Cox said combined rental, commercial and government purchases of new vehicles were down 7.3 percent last month.
Among brands, Ford, Ram, Mitsubishi, Volkswagen and Jeep have posted higher fleet shipments this year, Cox said, while fleet volume has dropped at Chrysler, Hyundai, Kia, Nissan and Chevrolet.
Zo Rahim, manager of economics and industry insights for Cox Automotive, said a potential record year in fleet sales wouldn't be a bad thing for the industry. Rahim said fleet vehicles today are of higher quality than previous decades, so they're turning into solid used options once their days on rental lots are over.
"It's not like your granddaddy's fleet," Rahim told Automotive News. "It's not the fleets that we saw in the '80s, '90s and early 2000s, where it was these cookie-cutter coupes with cloth interiors and roll-down windows. These are retail-ready fleet vehicles."
Meanwhile, Cox continues to see strength in the used market. Jonathan Smoke, chief economist at Cox, predicted that used sales will rise 1.5 percent this year, "which is in contrast with the decline that is likely to happen in retail new-vehicle sales."