By on December 12, 2016

Ford Fleet Transit

With nearly a third of its volume heading to businesses and government agencies, Ford is a bit of a fleet queen. However, the Blue Oval has been fairly uniform with General Motors in terms of volume when it came to selling its vehicles in bulk.

Not so this year.

General Motors is gradually pulling back from fleet sales, leaving FCA and Ford with a larger piece of the pie. GM’s total U.S. sales in November were up more than 10 percent from the previous year, giving it a larger share of the retail market and the confidence to abandon some of its fleet dependance. Meanwhile, Ford’s seems happy staying the course so long as the endeavor remains vaguely profitable. 

“We don’t see an adjustment necessary in the daily rental,” Ford’s president of the Americas, Joe Hinrichs, told Automotive News. “We think where we’re at is pretty good and pretty balanced.”

Balanced is the operative word here. While Ford’s November fleet sales slipped a bit from 2015, total fleet volume is up 2 percent overall for the entire year. The government’s love affair with the Taurus and the commercial success of its vans and F-Series trucks is well-known, and those are some of the biggest contributing factors to that growth. Fleet vehicles now make up 30 percent of Ford’s volume, well above the 19 percent average for other major automakers.

“The rest of our fleet business is very healthy, and we’re growing it; we don’t see a reduction coming,” Hinrichs said.

Meanwhile, General Motors reduced sales to rental companies by 75,000 units in 2016, and wants to trim its fleet offerings even further next year. The theory is that GM can earn more by focusing more on retail and won’t suffer quite so egregiously the next time there is an economic downturn. FCA, which has long vowed to trim its fleet sales, made progress on that goal in October.

“Rental business isn’t bad business,” GM’s president of North America Alan Batey told AN last month. “But we don’t need to do it to run plants anymore, and it puts pressure on resale values.”

However, Ford isn’t going overboard with rental sales either. While it says it’s comfortable with its current fleet size, it hasn’t let rental volume balloon anywhere close to pre-recession numbers. Ford’s leadership understands that individual customer sales are more lucrative but it doesn’t seem keen to abandon what it has.

“Retail sales by their very nature tend to be [more profitable],” said Stephen Odell, Ford’s executive vice president of global marketing, sales and service. “Clearly, we wouldn’t participate if it didn’t make financial sense for us.”

“It’s all in balance, of course,” Hinrichs told Automotive News. “The daily rental business is very different than it was 10 years ago when we had a lot more volume and more pronounced on one or two nameplates. Now, we’re pretty balanced at a lot lower volume.”

[Image: Ford Motor Company]

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24 Comments on “Ford to Become Captain of the Fleet as GM Shies Away...”

  • avatar

    Not all “fleet” sales are identical, and the linked article at least touches on that. Too many people hear “fleet” and assume it means “rental car.” Consider that the Transit is probably darn near 100% fleet/commercial sales, along with a huge chunk of Super Duty trucks.

    “Other automakers” don’t have as high fleet sales because *they don’t sell those products for commercial customers.*

  • avatar

    So rental sales haven’t spiked but niche segments have? Shame on Ford for selling vans and trucks to people who use them. They should totally let Tundra, NVs, and pro masters gain market share.

  • avatar

    JimZ – true. Truck and van fleets tend to get run hard and that drives down resale value which doesn’t put much downward pressure upon resale of “civilian’ pickups or vans. That may seem counter-intuitive and I’ll explain with an anecdote: My brother goes through a new crewcab HD 4×4 every 3 years on average. The truck is high mileage and beat to death. Resale on that truck is very poor. No one is going to compare the price of a 3 year old “civilian” use truck to his and say, “hey, drop your price because I can buy his for 5k.”
    Even typical rental truck and van fleets in my area tend to get beat up. They get rented for peak seasonal work and rarely get cross-shopped by used vehicle buyers.
    Cars on the other hand, even if abused don’t tend to look as beat up as a work truck and garner better resale prices.

  • avatar

    Ford NEEDS to do this to prove that its vehicles are 1800% more durable, 2300% more reliable, and have 900% better NVH characteristics, and 1/3 the running/fleet costs as Hondas and Toyotas.


  • avatar

    Neither Ford nor GM seem to be heavily pushing cars into the daily rental fleets; Ford’s fleet sales appear to be primarily to governments and commercial customers.

    FCA and Nissan, though, are a whole different story. Last week the National/Alamo/Dollar lot in EWR was two-thirds FCA and Nissan. And it’s a pretty typical scenario from what I’ve seen recently.

    • 0 avatar
      heavy handle

      Last time I was at the airport, the rental lots were Hyundai sedans/crossovers, and GM full-size SUVs.

      Ford’s rental queens are the Mustang, and anything you would rent from U-Haul (or similar).

      • 0 avatar

        The reality is that Ford was already the king of commercial vehicle fleets. The full size van segment is purchased almost exclusively by businesses and gov’t. Mercedes, Nissan and FCA must thing there is some decent profit in that class or they wouldn’t have entered the segment and they wouldn’t continue in the case of Mercedes at their weak volumes if they were loosing money like crazy on them.

    • 0 avatar

      I run into a lot of Fords at Avis.

  • avatar

    So long as there is a profit, it’s all good.

  • avatar

    This is mostly tongue-in-cheek, but as the most “American” car company, does it only make sense that Ford has the highest fleet sales, in the way that Toyota makes cars that only serve the domestic market, like the Century?

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