The vehicles in a rental car company’s lineup might have a few more miles on them nowadays. And there are likely fewer cars, pickups, sport utility vehicles and minivans on rental lots than just a few years ago.
Automakers say they are selling fewer vehicles to rental companies and fleet buyers, like corporations and governments. Car hire companies, in turn, say they are buying fewer vehicles and keeping the ones they have longer.
The result: Fleet sales were down last year. And they’re not expected to jump soon.
Fleet business has been an important part of new vehicle sales. Rental companies benefited by getting vehicles at a discount, albeit basic models with few upgrades. Automakers, especially domestic ones, sold new vehicles to fleet customers as a way to keep plants open, reduce their excess supply, boost sales numbers and get consumers to take a test drive of sorts.
“It’s sales versus no sales, even if it’s not the most profitable segment,” said Stephanie Brinley, an analyst with auto consulting firm AutoPacific. “It’s a really subtle sales tool.”
But fleet sales come with a cost: Too much fleet business can dilute a vehicle’s image and the value of a used vehicle. And at a time when consumer confidence is key, automakers are finding they need to carefully manage their brands.
As the recession continues to batter the auto industry, sales to rental-car companies are becoming a smaller part of the auto business.
Source: Saint Louis Post
