With Fleet Sales Booming,Chrysler Vows To Limit Sales To Rental Firms

Edward Niedermeyer
by Edward Niedermeyer
with fleet sales booming chrysler vows to limit sales to rental firms

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.

Join the conversation
4 of 31 comments
  • 200k-min 200k-min on Apr 28, 2010

    Remember there's a difference between a rental fleet sale and then fleet sales that end up as corporate company cars to sales staff and such. My father drove company cars for close to 40 years and although always a product of the Det 3, they were always nicer than the stripper rental car. At the end of the corporate lease he had the option to buy the vehicle at current auction prices, and often did. I fondly remember a childhood of riding around in Delta 88's and the like. Where fleet sales hurt a company is the example of my brother, someone working in sales that was given a "fleet" Dodge Caravan. That vehicle was of such poor quality that he has vowed to never buy a Chryco product ever. He and his wife recent voted with their wallet by buying a Ford. So, fleet sales are fine providing the product is competent and gives a good impression. Those products do eventually end up in private hands and will be deciding future purchases years down the road.

  • T8528sl T8528sl on Apr 28, 2010

    Dollar Thrifty wasn't too exposed by their choice of Chryco vehicles. As part of the rental fleet sales Chryco also agrees (at the time of sale) the resale value of the vehicle. If the resale value of the vehicle falls below the predetermined amount, Chrysler must make up the difference. Where the use of Chrysler vehicles hurts them is in their customer preference. If frequent renters don't prefer Chrysler vehicles (and most don't), they'll avoid Thrifty and Dollar.

  • George B George B on Apr 28, 2010

    The last car I rented was a Toyota Camry LE from Hertz. Had signed up for a Mazda 6, but they tried to give me a Mazda 5 with no hidden storage instead. The Camry had close to 40,000 miles and lots of dings and scratches, but it was a competent freeway cruiser with comfortable seats and a nice looking interior. Maybe the solution to the fleet sales dilemna is for rental car companies to buy fewer cars and put more miles on a car before selling it into the used car market. I preferred the year old Camry with scratches over the other choice offered, a newer Chevy Malibu.

  • Boyphenom666 Boyphenom666 on Apr 28, 2010

    @windswords and @PatrickJ That was exactly my point. I'm not saying the Sebring's a great car, but the way people talked about it you'd think it was as primitive as a Yugo when in reality it's not a bad car. As mentioned earlier, I am a Honda (actually Acura) driver, so I appreciate the touches of refinement you get in a Honda prodcut (I love the silky-smooth 4 cylinder and the way the wipers work on my dad's '10 Accord), my only point was that I don't think the Sebring was as bad as people were claiming.