Were You Aware?: Half Of All Large Car Sales Go To Fleets
Since ruling Americas roads in the heyday of the US auto industry, sales of large sedans (as a percentage of the overall market) have been in a decades-long slump. More recently, as SUVs have merged with large cars to form the modern crossover, the decline in large car sales has picked up speed. And there’s reason to expect that trend to continue, as a closer look at the data shows that market support for large sedans has eroded farther than even these numbers might suggest. One of TTAC’s well-placed sources reveals that the “large car” segment (admittedly, a notoriously difficult segment to accurately capture) is running at 50% fleet sales, year-to-date through October. That’s right, every second large sedan sold in this country end up as a fleet vehicle, many of them daily rentals.
How bad is that? For comparison, the midsized segment is running at 22%, the hot compact segment is only 16% fleet and most crossovers sell around 14% fleet. In short, as the market either downsizes to one of the ever-larger midsized or compact cars or upsizes to a CUV, large cars are becoming something of a consumer no-go zone. Welcome to the world captured brilliantly in Jack Baruth’s fictional work “ The CAFE Continuum.”
And I know what you’re thinking: some of the older, more obviously fleet-oriented offerings are wrecking the curve for the entire segment. Well, yes and no. For example the Chevy Impala, which Bob Lutz brags was voted “best fleet car” in his new book, was sold at a 73% fleet mix this year. That means that, of the 150k Impalas sold so far this year, only only about 40,500 went to retail customers who were won over by its charms. But it’s not a universal problem for the whole segment. In contrast, Toyota’s Avalon (which sold a much lower 23,507 units this year) had a mere 3% fleet mix. And unsurprisingly, Detroit leads the way: Taurus about met the segment average at 49% fleet, Dodge’s new Charger was 54% and Chrysler’s 300 sold at 25% fleet mix.
These numbers, which TTAC trusts but was unable to independently verify, tell a troubling story. I asked our source if these numbers had to do with the products, or an appeal towards fleet sales inherent to the large-sedan segment. The answer:
You can bet that Ford didn’t plan for its Taurus to be running at 50% fleet at this point.
I assume the same can be said for Dodge’s even-newer Charger. Chrysler has so little new product that it had better have planned to convince more than 25k buyers that the new Charger is worth a buy (by my calculation, only about 24,900 Chargers have been sold retail this year). But again, is the problem something fundamental with these models, or has the market simply turned its back on the big sedan? Our source wouldn’t delve any further into this conundrum with us, but it’s clear that the segment is in trouble. Without some kind of step-up in competition, America’s favorite segment could be doomed to fleet fodder status.
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I totally agree with you, and with the appropriately qualified statement above that the non-premium large sedan is dead. I made a similar comment on the Cadillac thread a few days ago. Retail customers who are spending more than $25k and want a larger vehicle are going to buy something that sits them up high. I'm trying to think of the rare exceptions I know personally. A friend's Dad (in his mid-60's) drives an Avalon. My wife's widowed great-aunt has one of the newer Buicks. As for 50- or 60-something empty nesters: my parents-in-law, my aunt and uncle, and my brother's parents-in-law ALL drive minivans, and they're all on their FIRST minivan, which they bought after the kids left the nest ("well, you know, it's good for when we've got the grandkids...") The last couple mentioned above also own a 7-series. Guess which car they prefer on long trips?
Why is this shocking? I remember ford retaining its #1 Selling Car in America badge for its last year with the '96 Taurus. After an extensive redesign to make the Taurus more upscale. Ford found that customers were not into the new oval shape and stayed away in droves, prefering the Camry and Accord. According to the Encyclopedia of American Cars, the Taurus managed to "retain its title as the bestselling car in the United States because of heavy sales to rental fleets; 51% of all Taurus sales for 1996 went to rental fleets, in contrast to the Honda Accord and Toyota Camry, of which most sales were to private customers through retail outlets." This is an old trick to pump up marketing numbers. There's nothing new under the sun.