By on January 4, 2008
avenger-with-model.jpgCNN Money reports that Jim Press, the Toyota-poached (not yet fried) Vice Chairman of the new Chrysler Corporation, has announced that his employer is striving to reduce its fleet sales to 20 percent of total sales. While that number may seem high, it would be a major accomplishment. Fleet sales of some Chrysler models have run well over 50 percent. From January to June '07, the Magnum (61 percent), PT Cruiser (65 percent), Crossfire (71 percent) and Avenger (79 percent) easily crested that benchmark. Mind-bogglingly enough, these figures do NOT include fleet sales made through Chrysler dealers. Though Press forgot to talk about Chrysler's current fleet sales percentages, he suggested that anything above 30 percent is "not a healthy way to manage our business." Ya think? Neither CNN nor Press deigned to specify which aspect(s) of fleet sales are detrimental to the domestic automaker's business, such as lower residual values, less incentive to design cars that compete at the retail level, brand stigmatisation, etc., etc. On the flip side, Chrysler plans a modest increase in retail sales. To the scrying eye, Press is preparing the press for a [rapid and continuing] decline in Chrysler's '08 market share.
 
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13 Comments on “Chrysler to Cut Fleet Sales to “Just” 20 Percent...”


  • avatar
    Blunozer

    Unbelievable.

    79% of Avengers go to rentals? If that doesn’t prove it a failure, I don’t know what does.

    I guess the good news here is the fire sale prices you can find a V6 Magnum, a highly underappreciated car.

  • avatar

    I’d summarize Chryslers problem with this question. How could anyone in the market for midsize car pick a Sebring versus a Camry, Accord, Fusion, Malibu or a Sonata?

    Their newest car is a big steaming pile of you know what.

  • avatar

    Blunozer :
    Unbelievable.
    79% of Avengers go to rentals? If that doesn’t prove it a failure, I don’t know what does.

    These are figures for the first half of ’07, before the new Avenger was introduced. The numbers for fleet sales for the last half of the year aren’t out so the new one might not be as high.

  • avatar
    N85523

    The Crossfire figure seems high and I can’t pick out why unless it sells in very small numbers and many of those go to rental outfits for their “fun-car” segment or something along those lines.

  • avatar

    I have never seen an Avenger that did not have a rental car company sticker on the rear bumper (except on TV… in a Dodge ad)

  • avatar
    Matthew Danda

    I almost bought a Magnum last year, when shopping for a non-SUV family car. However, I couldn’t stomach getting under 20MPG in a non-truck-based vehicle.

  • avatar
    jaje

    There are 2 methods of selling cars to commerical fleets. One is factory direct such as to rental agencies and likely government and very large corporations. These are the “fleet” sales they advertise and are trying to lower.

    The flip end is dealers also sell cars to fleets and commerical customers. In fact many dealers sell >50% commercially and at very low prices (< retail) but these are never counted as “fleet” in the MFGRs tabulations and instead considered “retail”. The reason I see this is that my friend’s business buys 20-40 company trucks at time at least once a year to rollout older vehicles which get traded in an go to wholesale. He deals exclusively with “retail” dealer and gets them for a very, very low price (though likely not as cheap as factory direct).

    B/c of this I see the MFGR’s model changing. Fleet sales directly from MFGR will be absorbed two fold – rental fleets holding cars longer (and charging customers more) – and many former fleets that purchased direct from the MFGR will now start buying from dealers at a slightly higher price (as maintenance gets too expensive). The MFGR wins b/c they now claim “retail” sale and advertise that their reduction in fleets sales are working and retail sales have increased.

  • avatar
    Alex Rodriguez

    “To the scrying eye, Press is preparing the press for a [rapid and continuing] decline in Chrysler’s ’08 market share.”

    Have you seen January’s sales numbers? With a new 300 and a new Ram coming in 09 along with a Challenger & Journey and extremely successful (see 36K in Dec sales) minivans, and solid Jeep lineup, Chrysler may do okay. And throw in Press and his “Project D” to fix the Sebring/Avenger.

    http://www.media.chrysler.com/newsrelease.do?id=7561&mid=1

  • avatar
    Alex Rodriguez

    Also, just an FYI….The Dodge Caravan outsold the Honda Odyssey in December to retain the crown of #1 minivan. A 51% December jump, coupled with a 7% decline by Odyssey and Caravan wins again.

    In fact, the Odyssey nearly slipped to third place in December sales as the Town & Country’s 31% increase nearly put it into the #2 spot.

    How does 400 thousand minivans flying out the door in 2008 sound? Sounds like positive market share to me.

  • avatar
    Redbarchetta

    How many of those minivan sales are to fleets? Unusual that December would be slow for all automakers but the Voyager increases 51%.

  • avatar
    SherbornSean

    Maybe Chrysler should go in the opposite direction of GM and Ford and embrace fleet sales. In fact, Chrysler should engineer its vehicles specifically for the fleet market.

    They could do it by making the interior out of the cheapest plastics possible. They could skimp on engineering, since no one keeps a rental more than a couple of years, and drive out cost/quality throughout the entire production process.

    Oh, wait, Chrysler already does that. Brilliant.

  • avatar
    Alex Rodriguez

    If there is one product where Chrysler still gets the benefit of the doubt, it has to be with Minivan. I am going to assume that at least 3/4′s of the 36K in Dec mini sales came from the retail side, unless I see hard evidence to the contrary. Chrysler has been advertising heavily, and the early reviews have generally been pretty positive. Additionaly, Odyssey doesn’t match up to the new Chrysler in terms of features.

    Maybe it is okay to give credit where credit is due.

  • avatar
    jaje

    Yeah, yeah Chrysler invented the minivan and stayed ahead of its domestic competition pathetic attempts at minivans until 1998 when its first serious competition in the Honda Odyssey came to being. Not too much longer the Sienna became a true full size competitor too. That’s 3 viable alternatives in a shrinking market (yep for the past 5 years minivan sales have been dropping to the point well below 1M a year). The Caravan won’t see 400k likely ever again unless the stigma of owning a “minivan” gets soccer moms out of their CUVs.


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