Chrysler Fleet Sales 2006-2010
Chrysler just filed its first SEC disclosure in over a decade, providing a peek under the hood of the smallest Detroit automaker. One of the most interesting items: a history of Chrysler’s fleet sales breakouts since 2006. And despite Chrysler’s vows to break its fleet addiction, 2010 saw the firm’s highest fleet percentage since 2006, at 36.1%. Back in the Cerberus days, they held the line at 30%, thank you very much. But then, ChryCo knows how to defend the fleet sales, arguing:
Although our vehicle sales to dealers for sale to retail customers are normally more profitable than our fleet sales, our fleet sales are an important source of revenue and can also be an effective means for marketing our vehicles. Further, fleet orders also help normalize our plant production because they typically involve the delivery of a large, pre-determined quantity of vehicles over several months. Fleet sales are also a source of aftermarket service parts revenue for us and service revenue for our dealers. In recent years, our fleet customers, particularly our commercial and government fleet customers, have tended to order vehicles that are smaller and are more fuel-efficient.
But the best thing about fleet sales? They conceal the steady erosion of consumer demand for your products and brands. After all, at 36.1% fleet mix, Chrysler only sold about 695,000 vehicles to actual retail consumers last year (100k-200k below what the firm’s five-year plan called for).
One more thought. Overall, fleet sales range from 17% to 22% of the total US car market:
" For the full year, fleet sales made up 17.1 percent of the U.S. market, down from a peak of 22 percent in 2005, according to Jeff Schuster, J.D. Power's executive director of automotive forecasting."
Hyundai used fleet sales of the US built Sonata to build up a production base before they had sufficient retail demand to buy all of that output. Now the Sonata is a hot retail product and Hyundai has been able to shift output from fleets to retail customers. This was a very savvy bit of management on Hyundai's part.
Fleet sales are not always bad and they are not always good. The full context needs to be considered.
Having recently purchased a Kia Sedona that was a Hertz rental for a year, I have no complaints. I got a clean vehicle at a good price. I doubt it took the abuse a Mustang or Camaro rental would have.
Is it just me that repeatedly gets the impression that if Chrysler had gone under, the champagne would have been flowing at Edward's pad...?
Oooh, the Koch Brothers, scary. Funny how when Libs make up a conspiracy, it gets gobbled up by the mainstream media, but when Glenn Beck touts one, he's nuts. All this "War on the Middle Class" stuff is silly. Is there a war? No. Is the middle class hurting because some (not all) of it is getting left behind as a result of globalization? Sure. What can you do? Make sure you have marketable skills, because there are few high paying, low skill jobs anymore. Most of the high paying low skill jobs have either disappeared due to automation or have been transferred to low wage countries. Be flexible, so if your employer dumps you for whatever reason, you can go elsewhere. The displacement we are experiencing is similar to the industrial revolution and mass movements from the farms to the cities experienced in the late 1800's and early 1900's. Not saying people aren't hurting, but it isn't the result of some idiotic conspiracy of rich men. Chrysler's failings were due to bad management by Daimler and Cerberus, bad union contracts (work rules, job bank, legacy costs), and the actions of millions of car buyers, who bought cars from other makers. I think there is something to be said for letting them fail. It would have made Ford and the new GM (I don't think politically either party would have let GM fail, too big) more successful. Perhaps some of the plants/jobs would have been saved, so it wouldn't have been a total loss.