The more things change, the more they stay the same. After bouncing back from bankruptcies, both General Motors and Chrysler have posted some commendable sales figures, but a new study from Automotive News suggests a sizable chunk of those figures were tied to sales to rental fleets, not retail sales.
According to Automotive News, Chrysler’s fleet sales in 2010 thus far have more than doubled to 39 percent, while fleet sales at GM have jumped a whopping 53 percent to 31 percent. Additionally, more than two-thirds of those vehicles are destined for rental car lots. Such growth isn’t surprising. Most rental companies abstained from purchasing cars in 2009, citing both a weakened market and uncertainties surrounding GM and Chrysler’s bankruptcies. As the market slowly recovers and fleets find their vehicles growing long in the tooth, their purchases will naturally increase.
The problem, however, lies with what follows afterward. Fleets don’t usually purchase vehicles year-round; once their batch of vehicles are built and delivered, they likely won’t return for a new order for another 6-12 months. Automakers are then forced to rely more upon retail volumes, and those volumes at both GM and Chrysler haven’t grown proportionately with fleet sales. Automotive News says GM’s retail sales have slipped by less than 1 percent, while Chrysler’s volumes have dropped by roughly 19 percent.
Other automakers have a much more favorable balance of retail and fleet sales. Hyundai’s fleet sales comprise 16 percent of total sales figures; 9 percent of Toyota’s volumes are tied with fleet purchases. Honda’s fleet volumes are reportedly in the neighborhood of 2 — yes, 2 — percent.
At first glance, Ford’s fleet sales are higher than GM’s, but the Blue Oval may be a little more likely to weather any fluctuation in fleet volumes than its cross-town rivals. Thirty-five percent of Ford’s sales figures are derived from fleet purchases, but deliveries to rental fleets have accounted for less than half of that total. Additionally, the company watched its retail sales jump 19 percent, besting the industry average growth of 15 percent.
Across the board, automakers widely expect to watch their fleet volumes taper off in the months to come. If consumer retail sales don’t begin to climb in the near future, several companies could potentially find themselves in a sticky situation.
Source: Automotive News (Subscription required)