As has been pointed out here many times, there are lies, damn lies and statistics. And depending on which statistics you're looking at, they can be used to support whatever you want to say. For example, Ford is number three in sales. Or Honda, depending on which statistic you're looking at. As far as total sales year to date are concerned, FoMoCo (781,791) is still solidly in third place, after GM (1,058,014) and Toyota (789,447) while Chrysler's staked out forth place (601,622) and Honda's trailing in fifth (487,642). However, Automotive News reports that if you factor out low-profit fleet sales, Honda moves to third and Ford drops to fourth. That's because retail sales make up only 65 percent of Ford's total sales and Honda's fleet sales are negligible. So Honda's retail number remains unchanged while Ford's drops to approximately 421k. So who's really number three? We report, you decide.
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3 weeks ago I rented from Hertz. They gave me an Accord. There were other Accords and a couple of Camrys on the lot as well. Yes, lots of Avengers too.
The Fleet sales thing is way over blown. In a bad economy a sale is a sale and pays the bills. I think they should factor out dirt cheap 2 yr. leases as well. What is the difference? If you look at Toyota they have their own rental company at their dealers. Are those counted?
Juniper,
I disagree. A retail sale is to someone who truly wants this vehicle, and is willing to spend $25K (or $400/month) to get it. If the retail customer is happy, they’ll buy from you again and again.
A fleet sale is to a fleet manager who wants the cheapest vehicle in its class. The end user is an employee who has to take the vehicle, and typically winds up hating it.
These seem different to me.
A sale is a sale. Ford still No. 3.
Not all of Ford’s fleet sales are to rental car companies. Ford sells many vehicles to corporate customers (utilities, etc.), state and local governments (police cars, heavy duty pickups) and taxi cab companies.
These sales are still profitable for Ford. The vehicles are not dumped into the used-car market within 12-18 months, so they don’t negatively affect resale value. In some cases, the vehicle earns respect for being sturdy enough to survive VERY heavy use (Crown Victorias as taxicabs, for example). Not all fleet sales are bad.
This type of sale constitutes a high percentage of Ford’s total fleet sales – the highest among the major automakers, if I recall correctly.
I agree with Sherborn. Fleet sales do not represent loyal customers, which is what D2.8’s management and the UAW should be concerned about. So big deal if Ford thinks their #3 as that won’t fix their problems.
And wow, Accords as rentals?! Nice!
It doesn’t matter how many cars you sell if you don’t do it profitably. The important fact that Ford faces is that Honda is consistently profitable and Ford is consistently UNprofitable.
Fleet sales may not represent loyal customers, but that isn’t what the statistic is trying to prove.
Ford made more sales than Honda. That’s a fact. It doesn’t matter how the sales are achieved. Admittedly, Honda will have the last laugh, because they bear a profit on each sale, whereas….well you know the rest.
If you start making exclusions like that, where does it end?
“GM made 1,000,000 in sales this quarter. But we’ve got to discount the pick up sales in Texas, because they ALWAYS buy GM pick up trucks!”
Don’t assume that all fleet sales are to rental car agencies, or that all fleet sales are undesirable.
I have a neighbour who works at Ford’s St.Thomas Assembly Plant. They are churning out Crown Victorias and Town Cars for fleet customers – law enforcement agencies and limo companies for example.
These customers (especially law enforcement) do extensive analysis before making a purchase. And they are repeat customers. And these sales are very profitable for Ford.
I’ve been seeing some odd options at rental agencies as of late: the Enterprise agent that we deal with has had:
* Mazda5s (quite a few, actually)
* Kia Rondos (along with the 5, this is probably replacing the SWB GM and Chrysler vans)
* Mazda CX-7s (!)
* VW Rabbits (!!!!!)
Most of the fleet is the usual Accent/Impala/Avenger banquet, though more often than not the compacts are Nissans (Versas & Sentras).
Ford’s truck business is designed to sell to corporate fleets. They are “loyal customers” willing to pay for Ford’s products. Those are profitable sales.
Honda’s fleet is also hardly nearly 0 now. It was 57,000 last year and looks to be climbing this year.
Again, facts here are completely messed up.
What is the percentage of Toyota’s fleet sales? I sure see alot of Toyotas (and Subarus) on the rental lots nowadays. I think that may have something to do with being able to see the vehicle after a year of rental abuse.
Which is another thing to remember, many non-government fleet sales end up going to the private market.
And can you not count corporate fleet sales? Those have a certain loyalty with them…and then you can add that those companies work with the automaker to offer employee discounts. Guess we shouldn’t count those (that’s how I got a good deal on my Mazda).
If I’m a retail customer do I want to look to buy a product that maybe more highly designed for fleets or from a MFGR who consistently designs product for retail (higher profit) customer only. I’ll go with the latter.
The great majority of Honda’s fleet sales are to municipals (such as the NGV Civic or Hybrids) who want to buy a green car. The Prius is also sold to many municipal fleets. Very little of Honda’s sales are to rental fleets which are the worst b/c those are supposed retail cars. Also take into account the D2.8 have now reduced fleet sales direct from the factory to now set up fleet department dealers and sell locally (but they get to count that sale as retail). So the fleet reductions the D2.8 say is the reason why they have lower sales are actually not as great as they claim (when have they been completely honest with us in the past 30 years?). Out of the 10 local D2.8 dealers by my house – 5 of them have built a seperate building specialized in “fleet sales”.
I doubt that a product is designed with fleet in mind…or be designed in an inferior manner. That may be true of Detriot in past decades, when you could get a no-frills, underpowered model with power nothing, an AM radio, and vinyl seats.
Those dealers are probably for business fleet sales, not rental fleet sales. Vehicles like the Econoline, Transit Connect, Sprinter, GM vans, and fleet trucks…
https://www.fleet.ford.com/showroom/Showroom.asp
Regardless of the “fleet good or bad?” question the retail ranking is interesting and the manufacturers would be fools to ignore it.
GM has 7k dealers and Ford 4.5k (?), Honda and Toy well under 2k each with little penetration into non-urban areas (small markets but they add up), yet they are scoring big with the retail customers.
Retail is the “must win” battle. The current score doesn’t look promising.
Anyone have the retail rank for the big 6?
Bunter
I don’t see a problem with Ford counting fleet sales in their total units sold. A sale is a sale. That number is mutually exclusive from whatever profit is made.
Ford actually seems to have a plan and IMO they have the best chance of the 2.8 of surviving into the forseeable future. The Fusion is a nice looking car. The Focus seems like a decent, if unexciting car (and for the price and intent of the Focus this seems to be more than adequate).
I remember when Dieter was boasting that Toyota would never pass Chrysler in sales in the USA.(before going back to Germany with tail between legs) And now Toyota is bigger than Ford and chasing GM and Honda is likely to surpass Chrysler. a couple more years of high gas and low sales and there won’t be anything left of the old Big 3.
What will happen to Ford’s fleet sales when the Panther goes the way of the dodo?
FunkyD
I don’t know, but it is going to suck.
The back seat of a TownCar is the ONLY way to get to the airport.
Discount fleet sales are good only on one condition – to help a factory reach economies of scale. Each factory has to run at a certain production rate in order to provide the lowest cost – that point is where you minimixe the fixed costs in each vehicle – any over production from there is more based on variable costs.
The D2.8 have so many factories that they have to keep running b/c they cannot throttle back production regardless of demand b/c they wind up paying workers to sit on their cans. Unfortunetaly the D2.8 have lost so much market share over the past 3 years that this is no longer possible even with fleet sales. They cannot sustain this myopic blind goal of growth at all costs from their head honchos and the unions’ crippling agreements.
They spend most of their time trying to spin the loss of market share as “mainly due to reduction in low cost fleet sales” whereas they are shipping more products through dealers to fleets – in other words they are padding the retail sales #s with fleet sales. Another bait and switch of viewpoints. So instead of spending all their resources to resolve the problem they spend most of their time covering it up and trying not to make it look as bad as it is. Until they have to release Financial Reports and then admit they cooked the books by swapping liabilities, assets, goodwill, expenses, depreciation, amortization etc. around – Just like GM had to do last Friday. It’s basically a bunch of 5 year olds who broke a window and won’t admit they did it and will spend most of their time denying it until it can be blamed on something else – nothing then gets done (kinda reminds me of our current WH).
Back to fleet sales – even though discount rental and taxi cab fleet sales are the worst kind…the volume discounts the corp and municipal fleets still do not make the same level of profit a retail sale can command.
Last time I rented a car I ended up with a Jetta. I feel bad for whoever ends up with it when Hertz is done. It may have drove better than a Malibu, but it did a lousy job hiding all the abuse that was heaped upon it.
A sale is a sale! You can’t just remove fleet sales from the equation because you feel like it. It’s still another car produced and sold. But, this all goes to show that the total sales ranking is NOT the definition of success.
Anybody can buy market share if they are willing to take enough loss. Dumping excess production into fleets is Detroit’s tried and true way of doing that.
So, to count fairly you need to count the number of vehicles each manufacturer sells with a profit.
That’s difficult to know. For instance, is selling pickup trucks still a profitable activity?
From this point of view, I’m guessing the ranking might be:
1. Toyota
2. Honda
3. Nissan
4. GM
5. Ford
6. Chrysler
And thus, Ford is in 5th place!
EJ_SAN_FRAN- Interesting twist.
Bunter
If Ford doesn’t sell to rental fleets, won’t somebody else? Why not grab the sale?
Small fleet sales (small fleet = less than 15 units/year) have always been mingled with retail, and this business has almost always been sold at the dealer level. When retail incentives have been greater than the fleet incentive for a given model, the sale is reported retail and incentives are claimed appropriately. Nothing new here.
Also, as long as volumes are at a level of critical mass (they still are at the moment), light and medium truck sales are still quite profitable for the OEM’s by the unit. Unfortunately, the volumes are down significantly and that has impacted overall profit.
Just to clarify, not all fleet business is unprofitable nor is it by definition less profitable than retail. That circumstance is really only typical of government, rental and 200+/year corporate fleets.