The Truth About Cars » Rental http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Wed, 10 Dec 2014 17:21:42 +0000 en-US hourly 1 http://wordpress.org/?v=4.0.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Rental http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Still Not Ready For The Rental Counter: EV Rentals Fail To Thrive http://www.thetruthaboutcars.com/2013/10/still-not-ready-for-the-rental-counter-ev-rentals-fail-to-thrive/ http://www.thetruthaboutcars.com/2013/10/still-not-ready-for-the-rental-counter-ev-rentals-fail-to-thrive/#comments Tue, 15 Oct 2013 19:00:01 +0000 http://www.thetruthaboutcars.com/?p=624593 ‘ Tis better to own a Leaf or an S than to rent one, it seems. According to Enterprise Holdings Inc., known for driving around in cars wrapped in branded brown paper for some reason, customers who rent electric-only vehicles from their lot soon return their sustainable rides for a one with a sustainable range […]

The post Still Not Ready For The Rental Counter: EV Rentals Fail To Thrive appeared first on The Truth About Cars.

]]>
Tesla_Supercharging_in_Gilroy

Tis better to own a Leaf or an S than to rent one, it seems. According to Enterprise Holdings Inc., known for driving around in cars wrapped in branded brown paper for some reason, customers who rent electric-only vehicles from their lot soon return their sustainable rides for a one with a sustainable range based on the number of (gasoline and diesel) fuel stops along the way.

In an interview with Bloomberg, Enterprise Head of Sustainability Lee Broughton note that while customers were “keen” to give electric power a go, range anxiety led many a renter to return the car for one where they know the infrastructure is there to meet. On average, a renter will spend almost two days with an electric-only car versus a week with a conventional road warrior. Currently, the St. Louis-based rental car business has 300 electric cars in their overall fleet, all Nissan Leafs. The figure is down 40 percent from the target of 500 of the cars set by Enterprise back in 2010.

Despite the overall lack of demand in this emerging rental market due to lack of infrastructure and larger-capacity batteries for extended range, competitor Hertz added the Tesla S to its Dream Cars lineup in September for their customer base in Los Angeles and San Francisco. The daily rate to feel like Elon Musk is $500; Enterprise offers the S in their Exotic Car Collection for $300 to $500 in the same locations, with three currently in the lineup available. The Leaf offered by Enterprise goes for $55 to $140 a day depending on location.

The post Still Not Ready For The Rental Counter: EV Rentals Fail To Thrive appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2013/10/still-not-ready-for-the-rental-counter-ev-rentals-fail-to-thrive/feed/ 33
The Truth About Honda’s Fleet Sales http://www.thetruthaboutcars.com/2013/08/the-truth-about-hondas-fleet-sales/ http://www.thetruthaboutcars.com/2013/08/the-truth-about-hondas-fleet-sales/#comments Sun, 25 Aug 2013 13:00:32 +0000 http://www.thetruthaboutcars.com/?p=500813 TTAC has a long tradition of digging deep into manufacturer sales data, frequently focusing on retail versus fleet sales. It’s become commonly accepted that high fleet percentages are a sign of weakness in product lines, at least as far as retail consumer preference goes. The traditionally low fleet percentages of Japanese brands have been singled […]

The post The Truth About Honda’s Fleet Sales appeared first on The Truth About Cars.

]]>
hondafleet

TTAC has a long tradition of digging deep into manufacturer sales data, frequently focusing on retail versus fleet sales. It’s become commonly accepted that high fleet percentages are a sign of weakness in product lines, at least as far as retail consumer preference goes. The traditionally low fleet percentages of Japanese brands have been singled out as evidence of those companies’ ability to attract crucial retail dollars, or at least their superiority in matching production to demand. And they were right. For many years, Toyota and Honda in particular could count on strong retail sales of premium-priced products in a way that the Big 3 couldn’t. Changing trends in the American vehicle market are undermining this model, though.

When I wrote about Toyota’s rising vehicle stockpiles, heightened fleet sales, deep discounts, and the resulting collapse of its pricing model, there was plenty of heated discussion. Although I was tarred and feathered by some as a Toyota hater and Detroit homer, they mostly missed the point: it’s no longer valid to think of Toyota as an “exceptional” car company from a business perspective, regardless of your personal opinions about the relative merits of their products. As the Camry debacle shows, the market is no longer willing to reward Toyota simply for the sake of being Toyota. For the sake of fairness, it’s time to ask the same set of questions about the company whose business strategy most nearly matches Toyota’s: archrival Honda. The evidence suggests there are some rather unpleasant fleet skeletons hiding in Honda’s closet, ones that don’t match the traditional image of the company as the retail leader.

On the surface, things look fine. Honda’s incentive spending on the marquee Civic and Accord is significantly lower than rivals. And its much-vaunted strategy of ignoring the fleet market and concentrating on retail sales is usually interpreted as a sign that Honda leads on per-unit profitability and “real” market share. Automotive News puts the Accord at around 1% fleet mix, well behind its rivals. But what if Honda’s position relative to the fleet market isn’t as strong as previously believed?

“Honda is the retail leader” has long been a mantra for that company’s boosters, one that is repeated by a fair number of autojournos. It’s a well-known fact that Honda has no corporate fleet sales department, in contrast to every other mass-market auto company in America. Even so, Honda products have a habit still show up in a variety of fleets. The vehicle-sales sites of several rental car companies have plenty of Hondas for sale. As of this writing, Enterprise Car Sales lists 200 former rental Hondas for purchase. The majority of these are Accords, with Civics not too far behind, and models from the entire rest of the range sprinkled in. For those feeling like something a little fancier, 22 Acuras are also available. Hertz also has hundreds of Hondas available, mostly 2012 Civics and a few Accords. Avis has no Honda products listed; nor does Budget.

It’s also worth noting that there are far fewer Hondas available for sale than, say, Chevrolets, Chryslers, or Fords. However, those makes include substantial numbers of trucks and commercial vans that Honda doesn’t offer. Honda has openly partnered with Zipcar to put hybrids in its fleet. Unfortunately, major fleet vehicle remarketing company Manheim doesn’t provide data on sales to anyone but licensed auto dealers, so I wasn’t able to scan their listed inventory for Hondas. However, salvage-auction company IAAI does provide listings of insurance-totaled Hondas, albeit ones that are difficult to sort and frequently incomplete. Even so, a casual scan through the listings reveals a surprising number of totaled-out Accords and Civics that had titles held by rental car companies or otherwise appear to have been former rentals. So clearly, a decent number of Honda products are winding up in America’s rental fleets. Many of the B&B have offered anecdotes about rental Hondas, but it’s nice to have a few solid numbers to go by. Maybe a reader with Manheim access could help flesh out the data.

civiccng

Besides rentals, governments are another important consumer of fleet cars. Honda’s CNG Civic fleet program is well-known, although these make up a tiny fraction of overall Civic sales. Even so, Honda has been enthusiastic about trying to expand this program, with Honda alternative fuel vehicle manager Eric Rosenberg previously quoted as saying “We’re looking forward to much healthier fleet sales as the economy makes that positive turn.” Civic Hybrids have made their way into government and corporate fleets as well, in far larger quantities. New York State has invested significantly in updating its fleet with hybrids, purchasing large quantities of Civics and the former Accord Hybrid from 2007 onwards.

As municipalities have looked to green their fleets, they’ve turned to Honda hybrids as well. A quick search of industry site Government Fleet turns up hundreds of examples of municipalities and state and local governments acquiring Honda hybrids. Toyota and Ford are also heavily represented in these hybrid fleets, but Honda still makes a strong showing. There’s less evidence that regular-drivetrain Hondas make it into government fleets in any great quantity, although I have personally seen them used by some universities as service vehicles. Many government fleet operators are restricted in their purchases by “Buy American” laws that can exclude foreign-make vehicles, even if they are American-assembled.

civicpremierwraps

Corporate fleet sales are always difficult to estimate, but anyone who’s lived in Central Ohio as long as I have can tell you that Honda products are popular choices for local businesses. The reliability and resale records of the Accord, Civic, and Odyssey no doubt attracts many operators looking to maximize their ROI. And although Honda has no corporate-level program for direct fleet sales, there are plenty Honda dealers who operate their own. Lindsay Honda of Columbus  explains that “With 14 acres of more than 700 Honda’s in inventory, Lindsay Honda can manage your order and pricing cost effectively, thus passing the savings to you.” Similarly, Don Carlton Honda of Tulsa promises customers “the benefit and tremendous value of our Honda Fleet Pricing while making the process of buying a new Honda vehicle simple and stress-free,” with a website specifically dedicated to facilitating fleet purchases.

In fact, it’s difficult to find a high-volume Honda dealer that doesn’t operate some kind of fleet program. And virtually all of these programs tout “preferred fleet pricing” and volume discounts for buyers, a seeming contradiction to Honda’s notorious stinginess with incentives. If you’re looking to buy ten Hondas for your fleet, there’s no shortage of dealers willing to cut you a discount, and take care of your service needs afterwards. But these dealers seem to be ignored or downplayed by Honda corporate, which steadfastly maintains that fleet sales are a vanishing percentage of Honda’s business. A press release from Honda on July 2 about rising sales crowed that “These solid results further showcase Honda’s pure, market-driven momentum achieved by customers choosing Honda vehicles one at a time rather than relying on fleet sales to drive volume.” The mantra about retail sales is clearly a big part of Honda’s marketing schtick. It seems that nobody has thought to ask the dealer body what they think about becoming Honda’s default fleet sales program, a role they may not appreciate. I can’t help but be reminded of an earlier episode in Honda’s corporate history where dealers took it on the chin.

hondataxi

Steve Lynch’s Arrogance and Accords is the definitive history of the early-90’s Honda management scandal. Lynch, a Honda insider, describes in detail a culture of malfeasance amongst American Honda executives that led to incredible acts of extortion against the Honda dealer body. Buoyed by the explosive growth of Honda in the go-go 1980’s, many prospective dealers were willing to enter into silent partnerships, kickback schemes, and other fraudulent behavior to secure valuable Honda franchises and a steady supply of cars from the corruption-riddled allocation system. When the market for new Hondas declined in the early 90’s (and dealers could no longer sell the cars for thousands of dollars above sticker), the whole scheme unraveled. Overproduction and flopped model introductions meant that cars sat on lots. A frustrated and abused dealer body finally ratted out the executives wholesale, leading to their firing and eventual federal prosecution after a failed cover-up attempt. But the dealer body didn’t get much out of the prosecutions; many of them lost millions of dollars, and others alleged that their businesses were ruined because they refused to “play the game” with Honda execs.

Obviously, much has changed since then; I’m not accusing Honda or its executives of engaging in criminal malfeasance. However, I do believe it is worth noting that Honda has a history of treating dealers as if they were replaceable; because for many years, they were. Lynch described a corporate culture that saw dealers as a nuisance and an inconvenience, a culture he alleges was facilitated by averted eyes in Tokyo. Now that the market for Honda products has matured, and the dealer body has been stabilized, perhaps it’s worth questioning whether making dealers solely responsible for the disposal of excess stock is a healthy policy. It’s also worth noting that many of the ex-rentals described above were 2012 Civics and Accords. Production of both of these models was stopped by the 2011 Asian tsunami, and for a long time Civics especially were thin on the ground at dealers. Yet despite these shortages, many newly-redesigned Civics still wound up in rental fleets, supposedly the dumping ground of last resort for unwanted models.

Auto industry watchers know that the redesigned Civic was harshly reviewed, prompting a quick 2013 refresh in response to criticism. Would it be unreasonable to suggest that dealers pushed many 2012s into fleets, knowing they would be a difficult sell if the much-improved version was right around the corner? The 2012 Accord as fleet car is easier to understand- a model at the end of its run is always a hard sell, and a few fleet sales at rock-bottom prices would have relieved the pressure on dealers to move the metal. But in both of these cases, the dealers were acting alone, with few corporate incentives to help cushion the blow.  The marketing department’s retail mantra remains untainted, and the cars move off the lots- but the dealers take the hit. The production recovery after the tsunami is unquestionable, but the sales recovery deserves an asterisk.

Honda Element Car Wraps-resized-600

The strategy of ignoring or underreporting fleet sales enables Honda to claim that its cars are somehow above and beyond the dynamics that the rest of the market faces. Every manufacturer will eventually face problems of excess inventory caused by a botched model launch or overproduction, no matter how sainted said company might be. It’s getting harder and harder for Honda to maintain this self-image after a series of uncompetitive new offerings has left dealers with large numbers of hard-to-move products. Civics are piling up on dealer lots as consumers gravitate towards the compact offerings of other manufacturers.

Toyota, at least, has acknowledged its difficulties with the Camry and has moved to help out its dealer network with a combination of incentive spending and diverting excess production to fleets. Even if it costs Toyota some credibility, it’s a better strategy than simply throwing cars at dealers and hoping a miracle happens. And it’s not as if fleet sales are an inherent evil; they’re a reality of doing business in the United States, one that no mass-market auto maker can evade forever. It’s impossible to put a solid number on the amount of Hondas currently being pushed to fleet by dealers. Even so, in the face of mounting evidence, the 1-2% figure most commonly put forth by Honda is almost surely too low. Given the state of flux and increasingly competitive nature of the American car market, industry watchers and the press corps need to regard that percentage with skepticism.
 

The post The Truth About Honda’s Fleet Sales appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2013/08/the-truth-about-hondas-fleet-sales/feed/ 120
Rent Out Your Car Via Onstar http://www.thetruthaboutcars.com/2011/10/rent-out-your-car-via-onstar/ http://www.thetruthaboutcars.com/2011/10/rent-out-your-car-via-onstar/#comments Wed, 05 Oct 2011 23:21:10 +0000 http://www.thetruthaboutcars.com/?p=413721 Onstar may have been pressured by privacy activists into dropping changes to its terms of service, but the telematics service is still betting that people want to be more connected than ever. So much so that it’s going offer a service allowing you to rent your car out to strangers. A GM press release explains […]

The post Rent Out Your Car Via Onstar appeared first on The Truth About Cars.

]]>

Onstar may have been pressured by privacy activists into dropping changes to its terms of service, but the telematics service is still betting that people want to be more connected than ever. So much so that it’s going offer a service allowing you to rent your car out to strangers.

A GM press release explains

RelayRides allows vehicle owners to choose to rent out their idle vehicles, with the owner controlling the rates and availability of the car. RelayRides provides an online marketplace and a $1 million insurance policy to make the transaction safe and convenient.

Through innovative technology integration, RelayRides will leverage OnStar to allow RelayRides borrowers to unlock GM cars with their mobile phones. For vehicles that are not OnStar enabled, RelayRides must install a small device in the car to provide convenient access to borrowers. The integration makes all eligible OnStar vehicles immediately “RelayRides ready” without having to install additional hardware…

RelayRides will leverage OnStar technology through a mobile application to allow customers to check for available vehicles, make a online reservation online as well as check future reservations, locate their reserved vehicle via GPS and lock and unlock the vehicle, all through their smart phone.

And GM isn’t just mating its Onstar technology to the “peer-to-peer” car sharing program (which is still only available in San Francisco and Boston), its VC arm GM Ventures “is in advanced discussions with RelayRides about an investment in the company as part of GM’s overall commitment to addressing urban mobility issues.” Car sharing programs have become a big trend in the automotive industry, with Daimler, BMW, Toyota and others jumping on the bandwagon in some form or other. But as might be expected from the company that brought us the Volt, rather than surf the trend, GM is going one step further by leading the industry into the peer-to-peer rental space. And as with all of these investments, it’s tough to see how this makes sense in the long term. In the short term though, at least this might “get butts into seats,” something GM execs say is the key to overcoming what they call “outdated perceptions” of GM products.

The post Rent Out Your Car Via Onstar appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2011/10/rent-out-your-car-via-onstar/feed/ 37
Are You Ready For: Peer-To-Peer Car Rentals? http://www.thetruthaboutcars.com/2011/06/are-you-ready-for-peer-to-peer-car-rentals/ http://www.thetruthaboutcars.com/2011/06/are-you-ready-for-peer-to-peer-car-rentals/#comments Wed, 08 Jun 2011 15:41:35 +0000 http://www.thetruthaboutcars.com/?p=397794 With car sharing on the rise, my home state of Oregon is moving towards changing insurance rules to allow private “peer to peer” rentals by auto owners. The Oregonian reports that HB 3149 is headed for the Governor’s desk, having been approved by the state House and Senate. Sponsor Rep Ben Cannon explains Most insurance […]

The post Are You Ready For: Peer-To-Peer Car Rentals? appeared first on The Truth About Cars.

]]>

With car sharing on the rise, my home state of Oregon is moving towards changing insurance rules to allow private “peer to peer” rentals by auto owners. The Oregonian reports that HB 3149 is headed for the Governor’s desk, having been approved by the state House and Senate. Sponsor Rep Ben Cannon explains

Most insurance policies prohibit people from using their cars for commercial purposes. This bill says someone can participate in car sharing without having to worry that their insurance will be canceled.

California is the only other state to have passed such legislation, and already Facebook-based peer-to-peer car rental firms like Getaround have popped up to fill the demand. With average car ownership costs reaching $8,000 per year according to the AAA, Cannon argues that research showing that cars sit parked for 90% of their lives proves the need for more car-sharing flexibility. And established car-sharing firms like Zipcar, which operate their own fleets don’t feel threatened by the bill, as they are not expanding beyond urban cores and as Zipcar’s CEO puts it, peer-to-peer rentals validate the car-sharing model. But would you rent your car to a stranger?

The post Are You Ready For: Peer-To-Peer Car Rentals? appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2011/06/are-you-ready-for-peer-to-peer-car-rentals/feed/ 26
Rental Car Industry Calls For Recall Of The Recall System http://www.thetruthaboutcars.com/2011/04/rental-car-industry-calls-for-recall-of-the-recall-system/ http://www.thetruthaboutcars.com/2011/04/rental-car-industry-calls-for-recall-of-the-recall-system/#comments Tue, 05 Apr 2011 18:33:19 +0000 http://www.thetruthaboutcars.com/?p=390080 We’ve long struggled with finding the right balance of recall coverage here at TTAC, as the sheer volume of them makes it extremely difficult to separate the life-saving wheat from the irrelevant chaff. Now, it seems the rental car industry is tired of struggling with the same challenge and is lobbying the government for reform […]

The post Rental Car Industry Calls For Recall Of The Recall System appeared first on The Truth About Cars.

]]>

We’ve long struggled with finding the right balance of recall coverage here at TTAC, as the sheer volume of them makes it extremely difficult to separate the life-saving wheat from the irrelevant chaff. Now, it seems the rental car industry is tired of struggling with the same challenge and is lobbying the government for reform of the recall system. Bob Barton of the American Car Rental Association explains the problem to the NYT

We can’t determine the significance of a recall and whether a vehicle is no longer safe to operate or whether it can continue to operate and then should simply be brought in for service at some point in time. We simply want the manufacturers to instruct us when a vehicle needs to be grounded and we will absolutely comply.

Fair enough. Recalls are carried out for plenty of non-safety-critical problems. But where do you draw that line? And, more importantly, does the rental industry enjoy enough of a reputation for safety consciousness to assure customers that their calls for reform won’t result in any increased danger?

It turns out that these two questions are actually closely related. Despite its framing of this lobbying issue as a matter of practical reform, the rental car industry is actually responding to a NHTSA investigation that recently found

30 days after a recall — 10 to 30 percent of vehicles sold to rental car companies had been repaired.

By 90 days, it had improved to about 30 percent and within a year, the number had improved to 50 percent or higher…

Rental car companies are not legally required to complete recalls before they rent the cars to customers.

This finding, that rental firms aren’t legally compelled to rent fully recall-compliant vehicles and that recalls take months to receive fixes, raises serious questions about the industry’s ability to guarantee the safety of their vehicles. Given the lack of legal pressure to comply with any recall, the NYT asked Barton how rental firms respond to recalls in the status quo.

Asked how recalls are handled now, Mr. Barton said: “If we get a notice that says the vehicle needs to be grounded, every company will set their own policy. But as a general rule I would suggest everybody would ground that vehicle.”

Asked about recalls for which the automaker does not say the vehicle should be parked until fixed?

“Every company will set their own policy, but ultimately that repair will get done, but maybe not immediately,” he said.

Not the most reassuring responses ever, to be sure. And given NHTSA’s investigation into the timeliness of rental fleets’ recal repairs, it seems obvious that this lobbying effort is a way to keep the industry operating without increased repair costs should NHTSA (or Congress) demand timely compliance with recalls. But without a coherent industry position, it’s hard to put its lobby arm in the driver’s seat of reforms to the nation’s entire recall system. As a result, a number of consumer groups have already voiced opposition to the ACRA’s initiative.

On the other hand, the ACRA insists that not even taxi or shuttle bus fleets are able to comply with the sheer volume of recalls, so a measure requiring the same level of recall compliance as new car dealers could have impacts beyond the rental car industry which has already attracted scrutiny. If NHTSA wants to take on the challenge and risk of creating a graded recall system, it should do so as a way to improve the communication of defects rather than a way to enable businesses who cut costs on safety. But if that happens and deaths from rental car and taxi malfunctions increases, there will be no evil lobbyists to scapegoat. NHTSA will have abdicated its mandate. Reforming the recall system is a big step and it should be done extremely carefully.

The post Rental Car Industry Calls For Recall Of The Recall System appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2011/04/rental-car-industry-calls-for-recall-of-the-recall-system/feed/ 4
BMW Seeks A Million New… Rentals? http://www.thetruthaboutcars.com/2011/03/bmw-seeks-a-million-new-rentals/ http://www.thetruthaboutcars.com/2011/03/bmw-seeks-a-million-new-rentals/#comments Tue, 22 Mar 2011 21:40:02 +0000 http://www.thetruthaboutcars.com/?p=388319 Think BMW sells a lot of cars in the US? The German automaker may have registered nearly 20,000 “sales” in the US last month, but according to the analysts at Polk, over 50 percent of its “sales” in 2010 were actually leases. No wonder BMW’s best-seller, the Dreier (3 Series), occupies a nearly unique position […]

The post BMW Seeks A Million New… Rentals? appeared first on The Truth About Cars.

]]>

Think BMW sells a lot of cars in the US? The German automaker may have registered nearly 20,000 “sales” in the US last month, but according to the analysts at Polk, over 50 percent of its “sales” in 2010 were actually leases. No wonder BMW’s best-seller, the Dreier (3 Series), occupies a nearly unique position on the price-volume frontier. And apparently BMW will continue to look to non-sales for future sales growth, as Automotive News [sub] reports the firm has launched a new car-sharing joint venture in Europe aimed at bringing in a million new customers by 2020. The pitch: sleek new Bavarian metal, as well as the ability to pick up and drop off vehicles anywhere, thanks to smartphone vehicle tracking. But the biggest pitch, say BMW sources, is to people who would never buy a new BMW… or even lease one. And they’re not just talking about poor folks either…

According to BMW sales and marketing chief Ian Robertson, the joint venture with German car rental giant Sixt isn’t so much about gaining new sales but about reaching urban consumers who are no longer choosing to own an automobile. In short, we’re looking at the endgame for automakers in mature markets: whereas leases are a good way to bring more buyers into the luxury brand they desire, this is about reaching well-off customers who simply are no longer interested in owning cars for a number of financial, environmental, and congestion-related reasons. BMW now joins Peugeot and Daimler in offering car-sharing programs in Europe, as consultants Frost & Sullivan project that by 2016, some 5.5 million Europeans and 4.4 million North Americans will use car sharing programs. At least in the dense urban cities of the developed world, car ownership is starting to sound so last century…

The post BMW Seeks A Million New… Rentals? appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2011/03/bmw-seeks-a-million-new-rentals/feed/ 18
Who Ruled The Rental Fleets In 2010? http://www.thetruthaboutcars.com/2011/01/who-ruled-the-rental-fleets-in-2010/ http://www.thetruthaboutcars.com/2011/01/who-ruled-the-rental-fleets-in-2010/#comments Thu, 20 Jan 2011 21:09:19 +0000 http://www.thetruthaboutcars.com/?p=381314 One of the questions that came up in yesterday’s post, The Truth About The Ten Best-Selling Sedans Of 2010, was how to interpret a high percentage of fleet sales. After all, “fleet sales” could describe a huge variety of sales to diverse buyers at widely varying price (and profit) points. Rental fleet sales are widely […]

The post Who Ruled The Rental Fleets In 2010? appeared first on The Truth About Cars.

]]>

One of the questions that came up in yesterday’s post, The Truth About The Ten Best-Selling Sedans Of 2010, was how to interpret a high percentage of fleet sales. After all, “fleet sales” could describe a huge variety of sales to diverse buyers at widely varying price (and profit) points. Rental fleet sales are widely seen as being far worse than other types of sales, which is why the resale value trackers at Automotive Lease Guide keep such a close eye on what they call “Rental Fleet Penetration.” In its latest newsletter, ALG notes

ALG tracks several key metrics that impact residual values and brand health. Of these metrics, rental fleet penetration (RFP), which ALG measures as the total number of vehicles sold into rental fleet channels divided by total sales, has been found to have an impact on both residual performance and perception of quality… As a general rule, ALG recommends RFP levels below 10% for Mainstream brands and <5% for Luxury brands to avoid any negative impact from rental fleet sales on residual performance.

The Chrysler brand, which has had a history of high rental fleet levels in the past several years, showed the highest increase in RFP to ~49% in 2010YTD compared to ~19% in 2009YTD. Dodge and Jeep, also operating under the Chrysler umbrella, showed high YOY increases in RFP with levels at 32% and 18% for 2010YTD, respectively. Though industry retail sales showed improvement in 2010YTD, the Chrysler, Dodge and Jeep brands all suffered declines in retail sales compared to 2009YTD. While the decline in sales has a positive impact on residual values due to the drop in used supply, the increase in rental fleet penetration will negate much of the used supply impact on residual values due to the decline in perceived quality and residual performance relative to the competitors.

Chevrolet also displayed high increases in RFP levels to ~26% for 2010YTD compared to ~13% in 2009YTD. Retail sales for the Chevrolet brand also increased, resulting in increased used supply for the brand which would negatively impact residual performance, holding all else constant. Mercury rounded out the mainstream brands that experienced the largest increases in RFP levels.

But that’s hardly the whole story…

ALG has found that rental fleet sales have an even more detrimental effect on residual values and perceived quality for luxury brands compared to mainstream brands. Cadillac showed the highest YOY increase in RFP from ~9% in 2009YTD to ~17% for 2010YTD. Though rental fleet sales showed a significant increase compared to the Luxury brand average, Cadillac has shown improvements in other metrics. Retail sales grew by 34% in 2010 compared to 2009 (July YTD), while incentives decreased. While this is a positive story for Cadillac, the increase in rental fleet penetration will place the brand at a disadvantage compared to other luxury brands that have kept rental fleet below the 5% mark.

The other brands in the luxury list all had fairly small changes to RFP levels and averaged <5% for both 2009 and 2010YTD. Both the mainstream and luxury domestic brands have shown higher rental fleet trends versus their import counterparts.

The post Who Ruled The Rental Fleets In 2010? appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2011/01/who-ruled-the-rental-fleets-in-2010/feed/ 30
Are Rental Cars Receiving Recall Repairs? http://www.thetruthaboutcars.com/2010/11/are-rental-cars-receiving-recall-repairs/ http://www.thetruthaboutcars.com/2010/11/are-rental-cars-receiving-recall-repairs/#comments Mon, 22 Nov 2010 23:21:20 +0000 http://www.thetruthaboutcars.com/?p=374021 NHTSA Investigation Action Number AQ10001, opened November 18, 2010 notes: The agency, particularly in recent months, has been informed of incidents involving allegations of personal injury and death claimed to have been caused by safety defects and failures to conform to minimum Federal Motor Vehicle Safety Standards (FMVSS) on rental car vehicles for which a […]

The post Are Rental Cars Receiving Recall Repairs? appeared first on The Truth About Cars.

]]>

NHTSA Investigation Action Number AQ10001, opened November 18, 2010 notes:

The agency, particularly in recent months, has been informed of incidents involving allegations of personal injury and death claimed to have been caused by safety defects and failures to conform to minimum Federal Motor Vehicle Safety Standards (FMVSS) on rental car vehicles for which a safety recall to remedy the safety defect or noncompliance had allegedly not been performed prior to the rental car company’s lease of the vehicle. NHTSA understands that there is presently a petition before the Federal Trade Commission (FTC) seeking to prohibit at least one rental car company from renting vehicles on which safety recall campaign remedies remain outstanding. The purpose of this audit query (AQ) is to investigate recall remedy completion by rental car companies on the above-listed safety recall campaigns. These campaigns were chosen due to their inclusion of vehicles used in the rental market. This information is expected to provide the agency an indication of how completely and how quickly rental car fleets, in general or individually, perform necessary recall-related repairs or other remedies on the vehicles owned and then leased for use on the roadways.

But rental companies wouldn’t risk the safety of their customers for a buck would they? The Enterprise/Alamo/National syndicate tells Bloomberg it grounds cars upon receiving recalls… Hertz and Avis have yet to chime in. The weirdest part of it all: only vehicles made by GM, Ford and Chrysler are being investigated. Why are the Accents and Rios receiving recall repairs while Avengers and Malibus are left to be investigated for “failures to conform to minimum Federal Motor Vehicle Safety Standards”? Whiskey Tango Foxtrot? A list of vehicles under investigation can be found below the fold.

Model/Build Years:
BUICK / ENCLAVE 2009
CHEVROLET / COBALT 2009
CHEVROLET / MALIBU 2009
CHEVROLET / TRAVERSE 2009
CHRYSLER / PACIFICA 2005-2006
CHRYSLER / SEBRING 2007-2008
CHRYSLER / TOWN AND COUNTRY 2005-2006
DODGE / AVENGER 2007-2008
DODGE / CARAVAN 2005-2006
DODGE / DURANGO 2005-2006
DODGE / GRAND CARAVAN 2005-2006
DODGE / NITRO 2007
FORD / ESCAPE 2001-2005
FORD / EXPLORER 2010
FORD / EXPLORER SPORT TRAC 2010
FORD / FOCUS 2000-2005
FORD / FUSION 2010
FORD / MUSTANG 2005-2008
GMC / ACADIA 2009
JEEP / COMMANDER 2006-2007
JEEP / GRAND CHEROKEE 2006-2007
JEEP / LIBERTY 2006-2007
JEEP / WRANGLER 2007
MERCURY / MILAN 2010
MERCURY / MOUNTAINEER 2010
PONTIAC / G5 2009
PONTIAC / G6 2009
PONTIAC / VIBE 2009-2010
SATURN / AURA 2009

The post Are Rental Cars Receiving Recall Repairs? appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2010/11/are-rental-cars-receiving-recall-repairs/feed/ 3
With Fleet Sales Booming,Chrysler Vows To Limit Sales To Rental Firms http://www.thetruthaboutcars.com/2010/04/with-fleet-sales-boomingchrysler-vows-to-limit-sales-to-rental-firms/ http://www.thetruthaboutcars.com/2010/04/with-fleet-sales-boomingchrysler-vows-to-limit-sales-to-rental-firms/#comments Tue, 27 Apr 2010 22:49:22 +0000 http://www.thetruthaboutcars.com/?p=354471 Fleet sales were up 47 percent in the first quarter of this year, driving sales at a number of automakers. Ford, in particular, is targeting fleet sales unapologetically by touting a recovery in resale values for the Blue Oval Brand. Ford’s Mark Fields tells the Freep: We love fleets at Ford…Ford remains focused on our […]

The post With Fleet Sales Booming,Chrysler Vows To Limit Sales To Rental Firms appeared first on The Truth About Cars.

]]>

Fleet sales were up 47 percent in the first quarter of this year, driving sales at a number of automakers. Ford, in particular, is targeting fleet sales unapologetically by touting a recovery in resale values for the Blue Oval Brand. Ford’s Mark Fields tells the Freep:

We love fleets at Ford…Ford remains focused on our disciplined approach to daily rental, making sure we help keep growing residual values

At Chrysler, which suffers from some of the lowest resale values in the business thanks in part to a longtime addiction to fleet sales, the response seems a bit more… conflicted.

Chrysler’s Peter Grady tells Automotive News [sub] that Auburn Hills is serious to getting fleet business to 25 percent of its sales mix, and that it will cap sales to rental fleets. He explains:

Our growth will come from large commercial and government markets

Of course he doesn’t mention that 58 percent of Chrysler’s February sales went to fleets (though AN [sub] does), nor does he specify details about the rental sales cap. But some kind of rental fleet sales reduction shouldn’t be too hard. Chrysler’s previous rental-fleet dumping grounds, Dollar-Thrifty, has been bought by Hertz, drying up the most loyal renter of Mopars. And the sale is no coincidence: according to Forbes, Dollar-Thrifty was vulnerable to takeover at least in part because of its exposure to Chrysler, and its plummeting resale values. Besides, as Automotive News [sub] has reported, Dollar-Thrifty dumped Chrysler before Chrysler dumped it. But then, Chrysler has been here before with the whole “capping fleet sales thing.” It hasn’t worked yet.

The post With Fleet Sales Booming,Chrysler Vows To Limit Sales To Rental Firms appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2010/04/with-fleet-sales-boomingchrysler-vows-to-limit-sales-to-rental-firms/feed/ 31
Rentin’ The Blues: First Place: 2010 Lincoln Town Car Signature Limited http://www.thetruthaboutcars.com/2010/04/rentin-the-blues-first-place-2010-lincoln-town-car-signature-limited/ http://www.thetruthaboutcars.com/2010/04/rentin-the-blues-first-place-2010-lincoln-town-car-signature-limited/#comments Wed, 14 Apr 2010 14:48:21 +0000 http://www.thetruthaboutcars.com/?p=352451 I’m going down to Memphis Where they really playin’ the blues I’m going down on Beale Street And have a good time like I choose “Thank you for coming to Budget. I have you booked for a Kia Optima.” “The hell you do.” “That is a full-size car as you requested.” “Well, in that case, […]

The post Rentin’ The Blues: First Place: 2010 Lincoln Town Car Signature Limited appeared first on The Truth About Cars.

]]>

I’m going down to Memphis

Where they really playin’ the blues

I’m going down on Beale Street

And have a good time like I choose

“Thank you for coming to Budget. I have you booked for a Kia Optima.”

“The hell you do.”

“That is a full-size car as you requested.”

“Well, in that case, I want something that is not a full-size car.” And that is how I came to be rolling through the proverbial Dirty South in a 2100-mile, 2010-model-year Town Car. Yes, they still make ‘em. The current lineup has been rationalized to Signature Limited (117-inch wheelbase) and Signature L (123-inch). There’s absolutely no reason of which I can think to take the SWB car, but that’s what the rental fleets have, and it’s what you can easily buy off-lease. I’ve found plenty of essentially identical two-year-old SigLims for under $20K, so this car is not only a direct used-price competitor for the 2009 Sable I reviewed previously, it’s also in the same ballpark as… a Kia Optima.

Automotive experts of the Internet, when they are not telling people that a 2009 Sable is virtually the same car as an old Volvo S80, like to tell people that a 2010 Town Car is virtually the same car as a 1979 Lincoln Continental sedan. This is true in the same sense that a 2000 Honda Civic Si is the same car as a 1988 Civic. In both cases, there were major dimensional and engineering changes across multiple generations of the same basic design. I am the former owner of a 1980 Mercury Marquis Brougham Coupe and I can state with authority that the current Town Car is nothing like that car in terms of driving dynamics.

This does not mean that recent Crown Victoria owners won’t be perfectly at home. Ford has steadily rationalized the differences between the Panther cars over time and this 2010 car is the most egregious example of that. Town Car aficionados (yes, they exist) will tell you to avoid Canadian-built TCs in favor of the Wixom, MI-assembled 2008 and earlier model years. They may have a point. The plastics and leather are okay, but they are nothing like what you would find in an Audi. Come to think of it, they aren’t close to what you would find in a new MKS.

Also not up to MKS spec: the sound system. You can get SYNC in a fifteen-grand Focus but not in a Town Car, and for the first time in my recent experience, the stereo simply isn’t loud enough. There is no navigation screen, no aux plug, no USB support, no nothing. The center console features dual-zone climate control and that’s more or less it.

Once in motion, the Town Car has a surprising flaw: it’s a wanderer on the highway, requiring constant correction and displaying quite a bit of sensitivity to side winds. My displayed mileage for the trip was 22.7 over the course of 2,635 miles, including a day in New York and one cruising around Memphis. There’s more than adequate power and the four-speed transmission rarely feels as if it needs additional ratios.

A snowstorm outside New York revealed why a whole generation of drivers abandoned big RWD cars: it was an absolute nightmare on a high-crowned, icy two-lane, requiring frequent, violent corrections at the helm to keep pace with the rest of the traffic. When the road turned dry, it was time to take advantage of the anonymity afforded a black Lincoln on I-95, pushing into the triple digits and pushing traffic out of the left lane with a double-blink of the brights and a bullying chrome grill. This is no sports car but it has some fundamental balance to it at speed. Too bad it has no brakes.

In traffic anywhere, the Lincoln is a fearsome weapon. It’s big, it’s official-looking, and it brake-torques from the lights like a Fox Mustang. The steering is light but accurate enough to place the car inches from a falafel vendor or inebriated pedestrian. Potholes don’t faze it. And Ford’s never bothered to put anything like advanced engine electronics in it, so you can wrap the seatbelt tight and left-foot-brake all day, standing the car on its nose on corner entry and then spinning the inside rear wheel on the exit.

If I came to admire the Town Car — and I did — my passengers admired it from the beginning, rating it above not only the Sable but vehicles like the Audi A6. Only my Phaetons have received higher ride-along reviews.

You’ll miss this car when it’s gone. It’s old, it’s flawed, it’s imperfect. Still, it’s utterly authentic, and when the last one rolls off the line we will never see its like again. If you haven’t driven one, it’s worth doing, and it’s as close as your local Budget Rent-a-Car. Unless, that is, you prefer a Kia Optima.

The post Rentin’ The Blues: First Place: 2010 Lincoln Town Car Signature Limited appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2010/04/rentin-the-blues-first-place-2010-lincoln-town-car-signature-limited/feed/ 71
Rentin’ The Blues: Second Place: 2009 Mercury Sable Premier http://www.thetruthaboutcars.com/2010/04/rentin%e2%80%99-the-blues-second-place-2009-mercury-sable-premier/ http://www.thetruthaboutcars.com/2010/04/rentin%e2%80%99-the-blues-second-place-2009-mercury-sable-premier/#comments Mon, 12 Apr 2010 18:06:24 +0000 http://www.thetruthaboutcars.com/?p=352211 I was born in the city A city with no shame And when I play guitar They all know my name Well, as fate would have it, they only really know my name at the local restaurant where I play lunch gigs on my Gibson CS-336. I don’t consider myself a blues man, but I […]

The post Rentin’ The Blues: Second Place: 2009 Mercury Sable Premier appeared first on The Truth About Cars.

]]>

I was born in the city

A city with no shame

And when I play guitar

They all know my name

Well, as fate would have it, they only really know my name at the local restaurant where I play lunch gigs on my Gibson CS-336. I don’t consider myself a blues man, but I will go to see the blues played when I have a chance. My plan for last week was simple: drive from Columbus, Ohio to New York City to see Robert Cray perform, and then to head down Memphis way to catch the various acts on Beale Street. Tie in an additional trip to the New York Auto Show afterwards, and we’re talking 4,100 miles and plenty of dicey parking. Might as well rent some cars and do an old-school TTAC rental review or two.

It’s been nearly a year since the last Sable rolled off the assembly line. It was a stopgap car, an attempt to rectify the most serious failings of the showroom-cobweb-holder Mercury Montego and mark time until a fully revised 2010 model could debut along the MKS and low-roof Taurus. Ford’s decision to take Mercury in the proverbial “different direction” doomed the Sable to rental-car hell and astonishingly low resale value. It’s possible to pick up a fully-loaded, low-miles Sable Premier for well south of twenty grand.

As I rolled along I-80 in Pennsylvania, the cruise control set to 82 miles per hour and the average-economy readout hovering at 27.9mpg, I had to admit that such a Sable purchase would represent a pretty decent value. It’s a nearly effortless freeway car, tracking straight and true, surprisingly indifferent to sidewinds. The seating position is seemingly about half a foot above what one would have in, say, an Audi A4, and visibility is good as well.

The Montego had a gutless three-liter Duratec and a rubber-band CVT, which probably did a lot to kill showroom excitement about what otherwise would have been seen as a decent 9/8ths-scale American knockoff of the B5 VW Passat. (Is it really a knockoff when you hire the same designer to do the same thing? Somebody should ask Gerald Genta.) This 3.5L/six-speed combination is manifestly better. It’s never strong or impressive, but it’s fast enough for modern American traffic, even in the cut-and-thrust of Manhattan’s Garment District. Hard launches spin the front wheels and bring the hammer of a very strict TCS down on the engine almost immediately. It’s not an enthusiast’s car in the traditional sense, or in any other sense.

Ford’s SYNC system was included on the car I drove, and as usual it’s just about the best way to control an iPod and Bluetooth phone together. The sound system was decent enough but lacking any sense of “dynamic attack”, “stage presence”, or any of the stuff you’d get in one of a name-brand luxury-sedan installation. A full navigation screen is an optional extra and one you’d be unlikely to find in an ex-rental.

I wasn’t more than a few hours away from Ohio when my traveling partner announced her complete lack of satisfaction with the Sable’s flat-bottomed leather seats. “They need to be good like the ones in your green car,” was the succinct evaluation. She chose instead to take a nap stretched out across the three-person back seat, wrapped up in a blanket and comforted by the Sable’s better-than-Camcord-class freeway ride. Four hundred miles later, my back was sore. These are not good seats; the ones you would get in an MKS or 2010 Taurus are miles ahead.

I believe the Autowriters’ Code of Conduct calls for me to mention the Volvo S80 at this point, along with something about ancient platforms. Truth be told, I’ve driven plenty of miles in a first-gen S80 and it’s a very different car. Both the Volvo and the Sable have that slight feeling of front-end crashiness and brittle response one gets from heavy transverse-engine platforms, but other than that it really doesn’t feel much like an S80.

It’s been a while since I resisted the temptation to run a car into the triple digits, even briefly. The Sable never even saw 90mph. It’s not an inspiring vehicle. It’s safe (allegedly), quiet, comfortable in some ways, well-equipped, spacious, and inoffensive-looking. I cannot see why anyone would pick the bloated, low-content Camry over this car, if the money is equal. Problem is, the money wasn’t equal. Ford wanted a lot of cash for the Sable.

Luckily, the used market has corrected that disparity. I turned around after Mr. Cray finished his two-hour set at B.B. King’s and drove back to Ohio. Twelve hundred miles in a day, about 27.5 mpg including time in the city. Not bad, but very far from being memorable. The next car I’d rent would be quite different.

The post Rentin’ The Blues: Second Place: 2009 Mercury Sable Premier appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2010/04/rentin%e2%80%99-the-blues-second-place-2009-mercury-sable-premier/feed/ 32
Infiniti Version Of Straight-To-Rental Nissan Leaf Planned http://www.thetruthaboutcars.com/2010/03/infiniti-version-of-straight-to-rental-nissan-leaf-planned/ http://www.thetruthaboutcars.com/2010/03/infiniti-version-of-straight-to-rental-nissan-leaf-planned/#comments Tue, 23 Mar 2010 17:55:58 +0000 http://www.thetruthaboutcars.com/?p=350089 One of the biggest conundrums facing the folks tasked with marketing the forthcoming first generation of mainstream electric cars is branding. On the one hand, firms want their mainstream brands associated with the green halo of having an electric car in its portfolio. On the other hand, electric cars aren’t cheap. From a pure pricing […]

The post Infiniti Version Of Straight-To-Rental Nissan Leaf Planned appeared first on The Truth About Cars.

]]>

One of the biggest conundrums facing the folks tasked with marketing the forthcoming first generation of mainstream electric cars is branding. On the one hand, firms want their mainstream brands associated with the green halo of having an electric car in its portfolio. On the other hand, electric cars aren’t cheap. From a pure pricing perspective, it makes more sense to brand expensive EVs as luxury products. GM struggled with this problem when it developed its Converj version of the Volt, ultimately deciding that the common-sense arguments for branding the $40k Volt as a Cadillac weren’t as important as boosting Chevy’s profile with an EV offering. Nissan, meanwhile, has decided that it has room for both a Nissan-branded Leaf EV and an Infiniti-branded luxury version.

Top Gear reports that the new Infiniti variant of the Leaf:

will use the same platform as the Leaf, but a different body. So it will be the smallest Infiniti. But all Infinitis are supposed to have high performance as well as being luxurious, so the motor power will be turned up compared with the Leaf’s.

Normally this would result in a shorter range, but the Infiniti electric car won’t be launched until 2014 or so, when Nissan is ready with its next generation of battery, which should hold enough charge to cope with the increased power.

At a projected (although not assured) price point of about $25k, there should be more room in Nissan’s portfolio for an upmarket EV, especially since it appears to be quite a few years off. Meanwhile, to make sure that the Leaf is sufficiently pedestrian to be differentiated from the Infiniti version, Nissan has announced [via Treehugger] that the rental firm Hertz will add the Leaf to its lineup starting in 2011.

A fleet queen EV? No wonder a luxury version is being planned. In seriousness though, acceptance of the Leaf by a major car rental firm will go a long way towards alleviating concerns about the pioneering EV. If nothing else, the rental program will be able to help target the leaf at its most important markets, and offer potential customers an opportunity to test the car obligation-free.

The post Infiniti Version Of Straight-To-Rental Nissan Leaf Planned appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2010/03/infiniti-version-of-straight-to-rental-nissan-leaf-planned/feed/ 10