Hoovey689

iTrader: (16)

Ford defends ballooning fleet sales

"Fleet" is sort of a dirty word when describing vehicle sales, and the Detroit Three have traditionally been quite smitten with bulk buyers. Unfortunately fleet sales have been demonized for a reason. They can adversely affect resale values, and since fleet buyers tend to expect warehouse store pricing, they're obviously not great for the bottom line, either. But one automaker seems more than happy to sell to fleets: Ford.

Bloomberg reports that a larger percentage of Ford's overall sales are going to fleets, rising from 22 percent of in 2006 to 27 percent in 2011. Of those vehicles, 41 percent reportedly went to the likes of Hertz and Enterprise. That leaves the rest of the sales at the local, state and federal level, plus a smattering of commercial buyers. In other words, needy customers with cash in hand. And those buyers tend to want high-margin rides like trucks, crossovers and SUVs; vehicles Ford make money on.

Ford fleet director Kevin Koswick tells Bloomberg that the automaker knows what it's doing, adding "I don't see it as an issue as long as you manage your fleet and you're balanced in what you do."

http://www.autoblog.com/2012/03/31/f...g-fleet-sales/

mmarshall

For years, back in the 1980s and 1990s, the Ford Taurus went neck-and-neck every year with the Camry and Accord as the top-selling car in the U.S. But a higher-percentage of Taurus sales were fleet-sales...mostly, of course, to rental-car companies.

spwolf

history repeats itself!

will they now stop quoting retail sales specifically in Ford PR's as obviously it is not important anymore? :-)

LexFather

Well if Ford doesn't sell Fleet, another brand will. There are many reasons why you have Fleet sales, a lot of business need company cars, there are govt contracts etc etc.

Hoovey689

iTrader: (16)

I'd rather be dragged to jail in a Taurus than an Impala

spwolf

problem with fleet sales is that you get them with more aggressive discounts... so when Ford raises them, it means they raised the discounts.

This is why their every PR from the past 4 years have specifically stated their higher retail sales and lower fleet sales.

reason Toyota and Honda sell a lot less to fleets is simply because they have lower discounts for fleet buyers

I8ABMR

If it makes money it will continue. I never knew people look down on fleet sales.

spwolf

it is a way to figure out how low your margins are... more fleet sales, lower margins.

Chyrsler and GM have greatest percentage of fleet sales, lowest margins and hence ended up broke with govt saving them.

Ford then made point of abandoning fleet sales, trumpeted it in every analyst call for the past 4 years... now they are back at them, cant be good.