Toyota Turning Toward Rental Fleets and the RAV4 to Boost Volume

toyota turning toward rental fleets and the rav4 to boost volume

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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  • Tele Vision Tele Vision on Jul 06, 2017

    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.

    • Maymar Maymar on Jul 07, 2017

      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).

  • Zip89123 Zip89123 on Jul 06, 2017

    The rental company mechanics will be happy, or unemployed.

    • See 4 previous
    • Secret Hi5 Secret Hi5 on Jul 08, 2017

      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?

  • 285exp I am quite sure that it is a complete coincidence that they have announced a $7k price increase the same week that the current administration has passed legislation extending the $7k tax credit that was set to expire. Yep, not at all related.
  • Syke Is it possible to switch the pure EV drive on and off? Given the wonderful throttle response of an EV, I could see the desirability of this for a serious off-roader. Run straight ICE to get to your off-roading site, switch over the EV drive during the off-road section, then back to ICE for the road trip back home.
  • ToolGuy Historical Perspective Moment:• First-gen Bronco debuted in MY1966• OJ Simpson Bronco chase was in 1994• 1966 to 1994 = 28 years• 1994 to now = 28 yearsFeel old yet?
  • Ronnie Schreiber From where is all that electricity needed to power an EV transportation system going to come? Ironically, the only EV evangelist that I know of who even mentions the fragile nature of our electrical grid is Elon Musk. None of the politicians pushing EVs go anywhere near it, well, unless they are advocating for unreliable renewables like wind and solar.
  • FreedMike I just don’t see the market here - I think about 1.2% of Jeep drivers are going to be sold on the fuel cost savings here. And the fuel cost savings are pretty minimal, per the EPA: fuel costs for this vehicle are $2200 and $2750 for the equivalent base turbo-four model. I don’t get it.