By on July 6, 2017

2016 Toyota RAV4/RAV4 Hybrid - Image: Toyota

We’re beginning to pummel a dying horse here but, as you already know, the North American automotive market is shrinking right now. Toyota wants to mitigate this by funneling sales into rental fleets. While this tactic has become unpopular with automakers like General Motors, others have bolstered fleet sales to cope with the lackluster demand. Hyundai, for example, has relied heavily on rental companies to boost its total volume, but the move has placed dealerships and the corporate office at odds with each other.

Toyota’s U.S. deliveries fell 3.6 percent through June of this year, which is 1.5 percent ahead of the industry’s overall decline. The automaker wants to fill the gap by ramping up volume to rental companies before the end of 2017. Like Hyundai, Toyota’s best sellers are passenger cars — which have taken the brunt of consumer apathy of late — but knows it can still unload them on Enterprise, Avis, and Hertz. 

The brand’s fleet deliveries were down about 20 percent during the first six months of 2017, according to Jim Lentz, head of Toyota’s North American operations. “A lot of our fleet sales are backloaded into the second half,” Lentz said in a Thursday interview with Bloomberg. “We’re confident we’re in good shape for the rest of the year.”

However, Japan’s biggest automaker hadn’t anticipated consumer sales slipping quite this much and originally planned to scale back fleet sales even further. Toyota sold about 219,700 vehicles to fleets in 2016, roughly 9 percent of its total volume, according to the Automotive News Data Center. It’s going to attempt to hit that mark again by the end of 2017.

Lentz also said the brand is also boosting production of the Highlander, Sequoia, and Sienna in Indiana and the C-HR crossover in Turkey. While it’s unlikely that demand for the Sequoia or Sienna will grow by leaps and bounds this year (at last not enough to offset waning car demand), sales for the Highlander are up by a fair margin. The C-HR is still too green to be a known quantity but the automaker has high hopes for the weird little crossover.

However, the real heavy lifting will be performed by the Toyota RAV4. With 2017 on track to be its best year ever, the company has accelerated production coming out of both Canada and Japan to take advantage. June deliveries for the RAV4 are already up 24.7 percent over last year’s volume.

[Image: Toyota]

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13 Comments on “Toyota Turning Toward Rental Fleets and the RAV4 to Boost Volume...”

  • avatar

    Nissan has been discounting and fleeting the Altima (and now the Rogue) to such a degree that they’re actually almost winning their respective categories. I’m not surprised Toyota’s not gonna let that happen.

  • avatar

    I cringe every time I have either a Nissan or Toyota rental.

    Luckily lots of Avis locations in the US offer app-based car swapping now.

    • 0 avatar

      I just got out of a Corolla rental. Roomy, but not very pleasant to drive. The programming of the CVT was weird, it would spin the engine up to 4000 rpm in response to even a modest pedal press.

      It was better than the Versa that preceded it.

  • avatar
    87 Morgan

    I am sitting in the Pork n Pickle at MCI havimg just turned in a Titan. I picked it up yesterday and had many Titans to choose from.

    Not a bad truck, but in typical Nissan fashion the front seat sucks and after a 100 miles or so I am ready for a Buick.

  • avatar

    Too late. Nissan has already locked up the market. I went to the Sierra earlier this summer, which is a haven for rental cars, particularly in the national parks. It looked like a communist country and brand-new Nissan Rogues were the state-sponsored vehicle.

  • avatar
    Tele Vision

    On the way home from a five-day ‘fishing’ trip yesterday I saw three VW Golf rentals. All three were the 2.5L and, no, they weren’t travelling together: it was over three hours from Golden, BC, to Okotoks, AB. Where does one rent a Golf? I’d love to try a new one for a weekend.

    • 0 avatar

      I think you mean the 1.8T? I don’t think any major rental agency would still be running MkVI’s. I can’t speak for anyone else, but Hertz definitely has them (I got a Golf last time I was in Vancouver).

  • avatar

    The rental company mechanics will be happy, or unemployed.

    • 0 avatar

      does such a job even exist? one would think these guys would buy new cars under warranty, use them while under that warranty (and roadside assist) and then get rid of them before the car loses too much value….

    • 0 avatar
      Secret Hi5

      Call me skeptical – I find it hard to believe that regular maintenance is properly performed on rental vehicles. On another note, I rented a QX70 last month – It requires “premium” gasoline according to a decal under the fuel door. How many renters will fill up with premium?

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