what is the purpose of this argument who cares how many cars gm sells to rental companies and the govt, what does that have to do with a company making a quality product?
This has already been explained on numerous posts on this board, but a summary:
-Fleet cars produce lower margins, reducing profits. When GM complains about not making money, one key reason has nothing to do with unions, competition or anything else, but the fact that they sell huge numbers of cars at low fleet prices.
-Fleet customers have short-term needs and don't have to live with the product day-to-day as does a retail customer. Serving their needs first will inspire automakers to make minimal R&D commitments, cut corners, and not think beyond the 25,000 mile/ 12-18 ownership horizon of their largest customers.
-Fleet sales push large numbers of used inventory into the marketplace early in the life of the car, depressing resale values. This reduces the incentive of educated retail customers to buy one, further hurting sales to higher-margin retail customers.
-Fleet cars can hurt the image of the car and the nameplate. Many retail customers don't want to own anything they perceive to be a rental box.
The fact that the Big 2.5 are claiming to make an effort to reduce their fleet sales shows you that the industry understands that this is a problem. Having a few fleet sales can be a good way to stabilize cash flows, but having large quantities of such cars does the automakers more harm than good, and harms them in the long run.
Actually there is a very good reason. Most fleet sales are built to a least common denominator with very basic models ( to which we can all attest ) with the expectation that the vehicles will be turned back in by the fleets within a year - then go into the used car market.
Essentially a company that specializes in building fleet/rental vehicles is actually building USED CARS and passing them off on retail lots as long term NEW CARS. If I was running GM and I knew that 40% of my sales were going to the used car market in 12 months or less I'd be taking everything I could out of the product in order to keep the price low.
Used car buyers buy these vehicles because they have some wear to them and the price is lower. Why build an auto that will last 150000 miles when it only has to last 15000 miles. This is beyond planned obsolescence.. and it's smart.
Malibu/G6 .. 58.0 K units YTD Camry ...... 54.8 K lame duck model Corolla...... 50.0 K Civic ........ 49.5 K Accord ..... 47.3 K Huh??? Altima ...... 36.1 K
Now fleet deliveries to be factored out??
Can't speak for anybody on your list in particular, but I do know that Ford deliveded 41% of February sales into fleets and DCX delivered 37% of total February sales into fleets. GM's fleet percentage was down, but I don't have the numbers.....I do know the Chevy Impala was up 39% on RETAIL sales.
Large Fleet sales are not unusual for January & February in the automotive industry as a whole.
March is traditionally the Month that retail sales really start to kick-in as consumers begin spending tax returns and start getting out into the nicer weather for those in the snowbelt.
Somebody educate me here, is the Civic in the Consumer Reports ratings the brand new for '06 Civic or the previous generation Civic that just went out ?
>Essentially a company that specializes in building fleet/rental vehicles is actually building USED CARS and passing them off on retail lots as long term NEW CARS.
Can you explain what you mean by this a little more.
"Honda Motor Co.'s redesigned Civic was named top small sedan for 2006, while the carmaker's first-ever pickup, the Ridgeline, won top truck honors, extending a run of critical raves for the two new models."
Just answered my own question while reading Automotive News. I'm puzzled though, as to how CR can rank a brand new model as top small sedan when the vehicle has just hit the market ? I thought CR collected consumer data ? How much data can be available the new Civic to formulate any rankings on quality, reliability, etc. :confuse:
Large Fleet sales are not unusual for January & February in the automotive industry as a whole.
If you worked in the industry, you know that you're taking that statement out of context, because it applies largely to the Big 2.5, not to the other automakers.
Typical fleet sales for the Big 2.5 are about 25% of total sales. Toyota reports theirs as being under 8%, and the majority of their fleet sales are to corporate accounts, not to rental agencies.
One out of eight new cars sold in the US each year is a rental car, and over 80% of those are from the Big 2.5. The math is pretty obvious.
Been in this industry since 1985 thank-you, you missed my point, which simply was that January and February have been, and continue to be months with higher fleet sales, as retail sales are traditionally down and impacted by consumers Holiday bills, folk's waiting for tax returns, etc. January/February are tough months for retail sales, especially in the snow belt.
Been in this industry since 1985 thank-you, you missed my point, which simply was that January and February have been, and continue to be months with higher fleet sales, as retail sales are traditionally down and impacted by consumers Holiday bills, folk's waiting for tax returns, etc. January/February are tough months for retail sales, especially in the snow belt.
A lack of retail demand is one reason, but this time of year is one of the prime purchasing periods for rental agencies, which tend to concentrate their purchases both now (particularly January) and in summer.
My point is that the Big 2.5 will enjoy relatively strong sales during this period because a large proportion of the many rental cars that they sell each year will be sold around now. You would expect the other automakers to suffer a proportionally larger decline in sales, because they do not have large fleet buyers to push their numbers and offset the lack of retail sales during the winter months.
Moral of the story: the fleet sales are good for unit numbers, not good for margins or as an indicator of consumer demand.
IMO.. and it's only mine.. one of the problems in the perception of the basic GM/Ford autos ( until now ) is that they were mundane and cheap in feel and appearance... in other words rental cars. If you were in Ford's place lets say making the Taurus, which may have gone 60% into rental fleets, and knew that the renters were just going to beat them to death for 12 months or so. Then at the end of the rental period these vehicle would be sold at auction and driven as used cars how much effort would you put into making them world class vehicles that delighted the eye, sensual to the touch and were bulletproof for 250,000 miles with the same owner? Why would you? In 12 months it will be a 20000 mile used vehicle. That's all you have to worry about. Used vehicles have no rights, everyone has some 'expectation' that something will go wrong with a used vehicle.
So on the same line that's producing your true retail vehicles how do you differentiate from the rental ones ( 60% ) and the retail ones? Do all the line rejects go to the rental fleets? Or...... do you just build all your vehicles to the lowest common denominator.. rental fleet quality. This actually is a very astute business decision if you are trying to save costs.
Then at the end of the rental period these vehicle would be sold at auction and driven as used cars how much effort would you put into making them world class vehicles that delighted the eye, sensual to the touch and were bulletproof for 250,000 miles with the same owner? Why would you?
I would. Selling these subpar cars have tarnished the brand.
Who rents car? Generally corporate types, white-collar managers with families and decent incomes. The rental experience turns people off to buying Big 2.5, because they take the mundane driving experience, combine that with the horror stories they've heard and the black circles in Consumer Reports, and conclude that the purchase is not worth the risk. That purchase of a competitor's product then creates brand loyalty to a different maker, and a new source for positive word-of-mouth to extol the virtues of the competition.
This has been a disastrous strategy which helps to explain the market share decline. Now the rental agency business is like heroin -- the Big 2.5 need the agencies to unload their excess capacity, yet can't charge them the prices that they'd need in order to make it worth their while to build them right.
"A lack of retail demand is one reason, but this time of year is one of the prime purchasing periods for rental agencies, which tend to concentrate their purchases both now (particularly January) and in summer."
Agree, ....business fleets are strong in January/February as well, as most company's that buy fleet vehicles prefer to spend on fleet vehicles from the Q1 budget. Business fleet orders are usually placed and received in the 4th quarter for 1st quarter build and delivery.
"My point is that the Big 2.5 will enjoy relatively strong sales during this period because a large proportion of the many rental cars that they sell each year will be sold around now"
Correct, we saw that in the January sales numbers and again in February, especially at Ford & DCX.
Please note that not all automakers report fleet sales, Nissan, for one, will not report fleet sales. And I've rented lots of Altima's from Avis & Hertz. I give kudo's to the automakers who do break out the fleet numbers, at least they have the guts to step up and report the sales numbers as they really are.....
"Who rents car? Generally corporate types, white-collar managers with families and decent incomes. The rental experience turns people off to buying Big 2.5, because they take the mundane driving experience, combine that with the horror stories they've heard and the black circles in Consumer Reports, and conclude that the purchase is not worth the risk. That purchase of a competitor's product then creates brand loyalty to a different maker, and a new source for positive word-of-mouth to extol the virtues of the competition."
LOL ! Hey, that's me, and I humbly drive a Chevy for my daily ride.....I do enjoy the rental experience when I get into a car that I've never driven before, that's always fun. I'm in San Diego quite a bit, and I always get an import brand from Hetrz when in San Diego.....
Please note that not all automakers report fleet sales, Nissan, for one, will not report fleet sales. And I've rented lots of Altima's from Avis & Hertz.
I have also rented the occasional transplant and foreign car from the rental agencies.
However, we know that the Big 2.5 automakers comprise 81% of the total rental market. That means you have Ford, GM and DC taking eight of ten sales, while all of the others (Toyota/ Scion/ Lexus, Nissan/ Infiniti, Honda/ Acura, Mazda, Hyundai, Kia, etc. etc. etc.) share the remaining 19% of the market.
The numbers make it clear: the Nissans, Toyotas, etc. in the rental fleet are going to be the exception, not the rule. There is simply no comparison in the volumes of cars being sold into fleets by the "American" automakers versus everyone else.
Expect a few brilliant surprises and enhanced performance in every aspect of the business soon from G.M. They will be quicker to market than ever with the well executed "home run" designs on world platforms.
I'm pretty sure I heard Roger Smith give a similar speech to this 20-25 years ago. People have stopped listening - it's all empty rhetoric at this point. Either show us the product, or go away.
In New York almost every single police car is Chevy Impala, and I assume it is similar situation in the rest of the country. Does anybody know what is the percentage of total Impala sales were to police?
I certainly think the way Impalas have held up during use by police and other fleets shows the durability of the car! I can't understand the negative on its use in fleets. But I guess it's a way to try to argue a debate.
I note that Priuses have been sold into fleets as well. I saw two Camrys at an area Hertz satellite a couple of weeks ago along with an Altima and a Kia. I understand Toyo does not give fleet data for sales.
I just got my latest "CAR ISSUE: of CR. Basically, they said buy Toyota or Honda. It can be summed up that simply. They also addressed the fact that those who don't like that advice say they are biased against American vehicles. They claim their statistics prove they are not.
Bottom line: They say n 8 year old Honda will only have as many problems as a 3 year old Ford. Now if YOU were going to buy a vehicle for your kid and wanted it to last for the next 10 years, what would YOU buy?
I have also rented the occasional transplant and foreign car from the rental agencies.
After my dad wrecked his car a few years ago, he got an '03 Nissan Maxima from Enterprise. They key is that it wasn't a base Maxima, but the sport-trim SE. People would have a better impression of domestics if their rental sales skewed more toward the higher trims, rather than the stripper specials.
I would. Selling these subpar cars have tarnished the brand.
I couldn't agree with you more. Tauruses/Escapes have completely turned me off Ford, whereas I have given over $90,000 of my money to Toyota because of a chance encounter with a rental Camry that was head and shoulders above the comparable rental junk.
That's why I typically buy my cars in January! I bought my 1989 Cadillac Brougham at the end of January as I did my Seville. Look at it this way: everybody else is broke. The salesman's broke because there are few customers and is willing to deal just to make a commission. All other buyers are broke from the holidays and winter utility bills. I'm also not too concerned about my tax return. I'm not so broke that my tax refund is considered my financial salvation. Winter utility bills? Well, I conserve the best I can.
Pretty much fits my description as well. I also like the experience of driving a different car. I've liked most of my rental cars and treat them as if they were my own. My rentals come back looking much nicer than when I got them. Some cars I liked so much I hated to turn them back in. My last rental was a 2005 Chrysler Sebring.
Turns me off the 2.5? Heck, more like reinforces my decision to stick with them! I could care less about Consumer Reports. If I want to read fiction, I'll buy a paperback novel.
My rentals come back looking much nicer than when I got them.
That already sets you apart from the average customer!
Not quite on topic, but I knew some folks who used to work for Hertz back in the 60's. For a time, the company was renting out Shelby Mustangs, only to find that some of the customers were swapping out their engines with those of regular Mustangs, leaving Hertz with a collection of underpowered "Shelby's". (Nice "weekend special", I guess.) I hope that isn't what you had in mind....
or as many said before, but you choose to ignore those comments - fleet sales are decreasing value of the used cars, since there are a lot of them on the market after only year being in fleets. And I wouldn't assume maintanence is the top priority in rental agencies, plus as a customer you would abuse your rental car more then your own. (how many time you fill up the tank with the cheapest gas you find regardless of the specification for that car?) So overall fleet sales do not help manufacturers, they actually devaluate the brand. BTW, Impalas are heavily modified before they become police cars, so I wouldn't say that because cops are buying them its because of their durability, probably because its just big and very cheap.
I wouldn't say that because cops are buying them its because of their durability, probably because its just big and very cheap.
In the US, police agencies generally want large RWD sedans with large trunks (room to carry prisoners and gear in the back), and often have limitations on buying non-Big 2.5 cars, which means they have very few choices to suit them.
So I wouldn't take their choices as votes of confidence, but as an indicator that there isn't much civilian demand for large RWD sedans, leaving few choices on the market for the police who actually want cars of this sort. That being said, the Crown Vics tend to be pretty solid, durable cars -- not particularly outstanding or refined, or the most desirable cars in their class, but reasonably reliable.
"For a time, the company was renting out Shelby Mustangs, only to find that some of the customers were swapping out their engines with those of regular Mustangs..."
Yikes. I thought their problem was from folks trying to race the cars?
Now that I think about it, that can't be right either; most of the GT350H's were equipped with automatics.
Speaking of rentals and bringing them back.....
I was in Tulsa one year ('89, '90?) for the Mid-American Shelby meet. Typically, the meet involves a day of open-track practice and time trials at Hallett raceway. I didn't have my Mustang ready for the event but, since it was open to any Ford powered cars, I rented a T-bird from Hertz and had at it.
A minor problem with brake fade( :surprise: ) sent me on one off-track excursion but I managed to beat at least one Boss302 with my lap times. :shades:
Obviously, the guy in the Boss wasn't pushing it very hard...
And since I took the car to a car wash before returning it (for some reason, there was a fair amount of grass hanging from the under carriage), I suppose it could be said I returned it looking nicer than when I got it!
It's not the individual sale to a fleet that matters it's both the quantity of vehicles ( degrades the perception ) and/or whether it was built with the intention to go into a fleet.
A fleet owner may buy a LS430 retail and put that in it's fleet for ultra-premium renters. that's much different than building half the output of an entire product line with the expectation that it will go to a fleet.
There is so much negative vibe to traditional American automobile car companies here. It really is a disappointing reflection on the optimistic spirit that is so lacking in the US today. Why are we so hell bent on tearing down established institutions who are major benefactors to our economy and our society? American cars are a result of OUR culture and many families and communities depend on them. They are who WE are educationally, morally and ethically. The infusion of other cultures mind sets has been good and absorbed. Why tear at the neighbor who shows the moxie to compete in favor of newcomers who have overhead advantages and built their core business by leveraging every cultural, economic and political device at their disposal? I dont blame them for doing it, Henry Ford built the first production lines with the sweat and blood of immigrant work ethic. If finger pointing is necessary, the finger is pointed at ourselves. An American Auto giant is nothing more than people with fine educations from the best schools to average folks trying to make a living,who earned the job they have and their place in society. The Big 2.5 are not the enemies of society, they are generally highly motivated people of every race and culture trying their best. They aren't interested in wasting their lives building inferior products anymore than you want to spend your hard earned money on one. Jim P.
Tauruses/Escapes have completely turned me off Ford, whereas I have given over $90,000 of my money to Toyota because of a chance encounter with a rental Camry that was head and shoulders above the comparable rental junk.
It amazes me that the Big 2.5 haven't used the rental market as an opportunity to get customers excited about their cars, rather than offering the opposite experience.
IMO, this provides an insight into the beancounting mentality prevalent in Detroit and Dearborn. Instead of using the rental fleet markets to promote their cars to the middle-class demographic whom they'd like to have as customers, they actually cheapen them to improve margins, forgetting that those improved margins come at the expense of a tarnished image. They apparently never learned that cost-cutting is a useful strategy to reduce a company's bleeding, but not the best method for growing market share.
If finger pointing is necessary, the finger is pointed at ourselves.
Wow, so now I'm to blame for the Cobalt. Well, had anyone in Detroit bothered to ask my opinion, I would have advised that they do better well before the car was launched.
Americans have been voting with their dollars, and as a result, the market share is falling. The people have spoken, and if these companies are so arrogant and tunnelvisioned that they don't want to listen to the marketplace's feedback, then it's the fault of the companies, not the customer.
If the product isn't selling, then the problem lies with the company, not the customer. Blaming the customer may be fun, but it won't increase revenues or improve the bottom line.
I'm not convinced these are "heavily modified." They are driven by the city manager, zoning, and other agencies and then turned into police service after a year FWICT.
They carry prisoners in the back seats.
>because its just big and very cheap.
I don't know how cheap they are. I don't follow the bidding int he city council minutes.
Car/ Units sold Ford Taurus / 101,416 Chevrolet Impala / 93,192 Chevrolet Classic / 92,544 Pontiac Grand Am / 75,819 Chevrolet Cavalier / 71,260
One point of interest is that GM kept the Grand Am and Mailbu (renamed "Classic) running in production after the launch of the new Malibu & G6. The Grand Am and old Malibu "Classic" were kept alive specifically for fleet sales and were not shipped to dealers. Once they come off fleet use, they will hit the general population as used vehicles though.
I believe Ford did the same thing with the Taurus after the launch of the 500 too.
If I was CEO of GM, I would push all of the fleet products under one nameplate (my choice would be Buick, being that its demographic is traditional and aging), while consolidating the other nameplates to avoid overlaps and keeping those entirely away from the rental fleets until the products are good enough to convert renters into GM owners.
I do see that they are making gradual changes to move away from the dependency on fleets, but the changes aren't severe or deep enough to create short-term benefit. It would take awhile to change perceptions. The more slowly they move, the longer it will take.
Police vehicles are indeed, significantly modified. The Ford Interceptor is a "heavy duty" Crown Vic, so to speak.
The cop-car version comes with modified suspension, high speed rated tires, HD electrical, HD engine cooling, HD transmisson oil cooler, and HO V-8 engines. Plus, those fancy flat-bench vinyl seats in the back.....The Interceptor makes for a very interesting used car buy though, and can be a fun car to have for a sleeper street car. Buyer beware though !!
Taxi cabs & municipal vehicles are more closely related to the every day driver Crown Vic.
The Ford Interceptor is the cop-car of choice across the USA, however, you will see Impala's & Intrepids in the mix too, along with Explorer's, Expeditions & Tahoe's. I've seen Camaro's & Mustang's in the past as well. I once got stopped by a full-size Chevy Van, that was indeed, a Police Cruiser.
Dodge is re-entering the market right now with a modified Charger for Police Cruiser duty.
Not a bad idea. I thought that's where they were heading with the Malibu Classic & Grand Am, but the Lansing Car Asm. plant where they were built has stopped production.....
"I certainly think the way Impalas have held up during use by police and other fleets shows the durability of the car! I can't understand the negative on its use in fleets. But I guess it's a way to try to argue a deba"
The '06 Impala has been awarded "Fleet Car of the Year" by fleet Manager's across the USofA ! Good or bad for the cars reputation ? I can't say, but Fleet Manager's like it though, and I would assume quality and reliability are right up there with cost as a purchase decision.
Here's where CR weighs in specifically on The General.....
CONSUMER REPORTS RECOMMENDS 13 GM VEHICLES FOR 2006 .... Consumer Reports Annual Auto Issue, which is on newsstands now, lists 13 out of 49 GM vehicles as "Recommended:" the Buick LaCrosse and Rendezvous, Chevrolet Impala, Monte Carlo, Malibu Maxx, Suburban and Avalanche, Cadillac CTS and STS, GMC Yukon XL, Pontiac G6 and Vibe and Saab 9-5. These vehicles represent twenty-seven percent GM's total models versus Japanese manufacturers with over seventy percent of their vehicles as "Recommended."
GM said - "Consumer Reports is one of the most influential sources used by consumers to make purchase decisions. GM's greatest challenge, to improve results in this publication, is consistent execution in performance, reliability and safety across all vehicle lines," said Jamie Hresko, GMNA vice president of Quality.
Well, first of all, the bias began with the Babyboomer generation that saw anything as GM/Ford/Chrysler as part of the "establishment" and that buying an import was making some kind of statement.
That is really far-fetched. There is a simpler explanation.
I think that I am like many consumers in US in regard to wanting to get the most value for hard-earned dollars spent. To get most value, need to be open-minded and get as much information and/or test-drive, demonstrations, hands-on, etc as possible to make informed decision.
I have purchased many new American brand vehicles in my life. I do recall trying out and taking a pass on very early Japanese cars in our country. As Japanese brands improved their quality and offerings, I as many, were eager to try them out when ready for next vehicle purchase. This happened to me in 1984. I was looking for a small 4-cylinder vehicle and test drove cars of similar engine size and body size from Honda, Toyota and the 3 American auto manufacturers. I was literally amazed at level of superiority of the 84 Honda over the domestics in all major vehicle attributes - fit/finish, engine, transmission, handling and feel, interior, paint, etc, etc. I bought the Honda, put on 195K miles and used it as a fourth vehicle in its last years. Sold it in 1998 to a contractor doing work on my property who spotted it in barn and asked to buy it. Contractor still comes out to do work for us.
I think that you will find similar stories (except for barn and contractor) from tens of thousands of Americans who merely have open minds and go out and try and then buy so-called "foreign" brands.
Interestingly enough it also represents some of the most critisized cars in this forum. Explain to me how a Camry can be good becuase CR says so, but an Impala garbage dispite what they say.
I wish CR would show the actual percentages of problems in categories, instead of assigning their little black and red dots.
Graphics, such as filled-in black or red circles, are much more powerful at conveying information than would be tables of numerical data. CR does explain what different types of circles mean in numerical sense. Would one rather see the DJIA expressed in a table of numerical values or in a line chart? I think that vast majority of folks would pick the line chart.
So you're saying a line chart with 5 points is the way to represent the DJIA?
The line chart has an (infinite) large number of points representing the ebb and flow of the the DJIA; not just 5 points. If CU were to use a infinite scale then they would give the number for each of the points rather than half circles and full circles.
So you're saying a line chart with 5 points is the way to represent the DJIA?
Did not say that. You are twisting my message. Let me try again. The point I made is that graphics are more powerful and easier to understand than a table of values. One could discern a direction/trend/etc in a DJIA year much quicker and easier in a graph than in looking at say a table of 52 numerical values. That's not to say that a person would exclude wanting to look at individual values in a table in correlation when looking at a graph.
In a similar fashion, when I look at an issue of CR (have 2003 at hand and will use in example), I see that Lexus LS400/430 has mostly full red circles, no full black circles and only one one-half black circle. In contrast, Caddy DeVille has some full black circles, many empty circles, some half black circles and smattering of full red circles and half-red circles. Just 2 seconds looking at each of these charts makes powerful statement about "relative" reliability of each of these makes through 2002. Of course, one would want to spend time and thoroughly read and absorb the circles for each and every reliability attribute for the vehicle brand of interest.
"Interestingly enough it also represents some of the most critisized cars in this forum. Explain to me how a Camry can be good becuase CR says so, but an Impala garbage dispite what they say."
Well, first of all, the bias began with the Babyboomer generation that saw anything as GM/Ford/Chrysler as part of the "establishment" and that buying an import was making some kind of statement.
I strongly agree with Lemko on this one. I would state that it has more to do with "one-upping the Jones'" or adopting a new identity. The purchase of a foreign car seemed to make a middle-class buyer feel somehow superior/unique to his/her middle-class neighbor in a Buick. Toyota and Honda are good cars, however, the quality difference between Japanese and US cars is much more perception than reality. It's amazing to me how vehemently buyers defend cars (foreign and domestic) even though they had nothing to do with the building, designing or testing of the car.
Comments
This has already been explained on numerous posts on this board, but a summary:
-Fleet cars produce lower margins, reducing profits. When GM complains about not making money, one key reason has nothing to do with unions, competition or anything else, but the fact that they sell huge numbers of cars at low fleet prices.
-Fleet customers have short-term needs and don't have to live with the product day-to-day as does a retail customer. Serving their needs first will inspire automakers to make minimal R&D commitments, cut corners, and not think beyond the 25,000 mile/ 12-18 ownership horizon of their largest customers.
-Fleet sales push large numbers of used inventory into the marketplace early in the life of the car, depressing resale values. This reduces the incentive of educated retail customers to buy one, further hurting sales to higher-margin retail customers.
-Fleet cars can hurt the image of the car and the nameplate. Many retail customers don't want to own anything they perceive to be a rental box.
The fact that the Big 2.5 are claiming to make an effort to reduce their fleet sales shows you that the industry understands that this is a problem. Having a few fleet sales can be a good way to stabilize cash flows, but having large quantities of such cars does the automakers more harm than good, and harms them in the long run.
Essentially a company that specializes in building fleet/rental vehicles is actually building USED CARS and passing them off on retail lots as long term NEW CARS. If I was running GM and I knew that 40% of my sales were going to the used car market in 12 months or less I'd be taking everything I could out of the product in order to keep the price low.
Used car buyers buy these vehicles because they have some wear to them and the price is lower. Why build an auto that will last 150000 miles when it only has to last 15000 miles. This is beyond planned obsolescence.. and it's smart.
Camry ...... 54.8 K lame duck model
Corolla...... 50.0 K
Civic ........ 49.5 K
Accord ..... 47.3 K Huh???
Altima ...... 36.1 K
Now fleet deliveries to be factored out??
Can't speak for anybody on your list in particular, but I do know that Ford deliveded 41% of February sales into fleets and DCX delivered 37% of total February sales into fleets. GM's fleet percentage was down, but I don't have the numbers.....I do know the Chevy Impala was up 39% on RETAIL sales.
Large Fleet sales are not unusual for January & February in the automotive industry as a whole.
March is traditionally the Month that retail sales really start to kick-in as consumers begin spending tax returns and start getting out into the nicer weather for those in the snowbelt.
Can you explain what you mean by this a little more.
2014 Malibu 2LT, 2015 Cruze 2LT,
Someone just posted here that Prius is being sold into the fleet market. Do all the statements about fleet still apply?
2014 Malibu 2LT, 2015 Cruze 2LT,
Just answered my own question while reading Automotive News. I'm puzzled though, as to how CR can rank a brand new model as top small sedan when the vehicle has just hit the market ? I thought CR collected consumer data ? How much data can be available the new Civic to formulate any rankings on quality, reliability, etc. :confuse:
If you worked in the industry, you know that you're taking that statement out of context, because it applies largely to the Big 2.5, not to the other automakers.
Typical fleet sales for the Big 2.5 are about 25% of total sales. Toyota reports theirs as being under 8%, and the majority of their fleet sales are to corporate accounts, not to rental agencies.
One out of eight new cars sold in the US each year is a rental car, and over 80% of those are from the Big 2.5. The math is pretty obvious.
A lack of retail demand is one reason, but this time of year is one of the prime purchasing periods for rental agencies, which tend to concentrate their purchases both now (particularly January) and in summer.
My point is that the Big 2.5 will enjoy relatively strong sales during this period because a large proportion of the many rental cars that they sell each year will be sold around now. You would expect the other automakers to suffer a proportionally larger decline in sales, because they do not have large fleet buyers to push their numbers and offset the lack of retail sales during the winter months.
Moral of the story: the fleet sales are good for unit numbers, not good for margins or as an indicator of consumer demand.
So on the same line that's producing your true retail vehicles how do you differentiate from the rental ones ( 60% ) and the retail ones? Do all the line rejects go to the rental fleets? Or...... do you just build all your vehicles to the lowest common denominator.. rental fleet quality. This actually is a very astute business decision if you are trying to save costs.
I would. Selling these subpar cars have tarnished the brand.
Who rents car? Generally corporate types, white-collar managers with families and decent incomes. The rental experience turns people off to buying Big 2.5, because they take the mundane driving experience, combine that with the horror stories they've heard and the black circles in Consumer Reports, and conclude that the purchase is not worth the risk. That purchase of a competitor's product then creates brand loyalty to a different maker, and a new source for positive word-of-mouth to extol the virtues of the competition.
This has been a disastrous strategy which helps to explain the market share decline. Now the rental agency business is like heroin -- the Big 2.5 need the agencies to unload their excess capacity, yet can't charge them the prices that they'd need in order to make it worth their while to build them right.
Agree, ....business fleets are strong in January/February as well, as most company's that buy fleet vehicles prefer to spend on fleet vehicles from the Q1 budget. Business fleet orders are usually placed and received in the 4th quarter for 1st quarter build and delivery.
"My point is that the Big 2.5 will enjoy relatively strong sales during this period because a large proportion of the many rental cars that they sell each year will be sold around now"
Correct, we saw that in the January sales numbers and again in February, especially at Ford & DCX.
Please note that not all automakers report fleet sales, Nissan, for one, will not report fleet sales. And I've rented lots of Altima's from Avis & Hertz. I give kudo's to the automakers who do break out the fleet numbers, at least they have the guts to step up and report the sales numbers as they really are.....
LOL ! Hey, that's me, and I humbly drive a Chevy for my daily ride.....I do enjoy the rental experience when I get into a car that I've never driven before, that's always fun. I'm in San Diego quite a bit, and I always get an import brand from Hetrz when in San Diego.....
I have also rented the occasional transplant and foreign car from the rental agencies.
However, we know that the Big 2.5 automakers comprise 81% of the total rental market. That means you have Ford, GM and DC taking eight of ten sales, while all of the others (Toyota/ Scion/ Lexus, Nissan/ Infiniti, Honda/ Acura, Mazda, Hyundai, Kia, etc. etc. etc.) share the remaining 19% of the market.
The numbers make it clear: the Nissans, Toyotas, etc. in the rental fleet are going to be the exception, not the rule. There is simply no comparison in the volumes of cars being sold into fleets by the "American" automakers versus everyone else.
http://www.fleet-central.com/af/t_resources.cfm?action=af_stat
I'm pretty sure I heard Roger Smith give a similar speech to this 20-25 years ago. People have stopped listening - it's all empty rhetoric at this point. Either show us the product, or go away.
The top five rental cars for the 2004 model year:
Car/ Units sold
Ford Taurus / 101,416
Chevrolet Impala / 93,192
Chevrolet Classic / 92,544
Pontiac Grand Am / 75,819
Chevrolet Cavalier / 71,260
I'd be curious to know what percentage of the total cars sold for each of these marques was a rental car.
I note that Priuses have been sold into fleets as well. I saw two Camrys at an area Hertz satellite a couple of weeks ago along with an Altima and a Kia. I understand Toyo does not give fleet data for sales.
2014 Malibu 2LT, 2015 Cruze 2LT,
Bottom line: They say n 8 year old Honda will only have as many problems as a 3 year old Ford. Now if YOU were going to buy a vehicle for your kid and wanted it to last for the next 10 years, what would YOU buy?
After my dad wrecked his car a few years ago, he got an '03 Nissan Maxima from Enterprise. They key is that it wasn't a base Maxima, but the sport-trim SE. People would have a better impression of domestics if their rental sales skewed more toward the higher trims, rather than the stripper specials.
She basically said the Maxima's were generally hard to get because people would request them over the other cars in their fleet.
I'd fly into Chi town to visit and I never could get a Max (always rented), I usually ended up with a LeSabre (Yawn).
I couldn't agree with you more. Tauruses/Escapes have completely turned me off Ford, whereas I have given over $90,000 of my money to Toyota because of a chance encounter with a rental Camry that was head and shoulders above the comparable rental junk.
Turns me off the 2.5? Heck, more like reinforces my decision to stick with them! I could care less about Consumer Reports. If I want to read fiction, I'll buy a paperback novel.
That already sets you apart from the average customer!
Not quite on topic, but I knew some folks who used to work for Hertz back in the 60's. For a time, the company was renting out Shelby Mustangs, only to find that some of the customers were swapping out their engines with those of regular Mustangs, leaving Hertz with a collection of underpowered "Shelby's". (Nice "weekend special", I guess.) I hope that isn't what you had in mind....
So overall fleet sales do not help manufacturers, they actually devaluate the brand.
BTW, Impalas are heavily modified before they become police cars, so I wouldn't say that because cops are buying them its because of their durability, probably because its just big and very cheap.
In the US, police agencies generally want large RWD sedans with large trunks (room to carry prisoners and gear in the back), and often have limitations on buying non-Big 2.5 cars, which means they have very few choices to suit them.
So I wouldn't take their choices as votes of confidence, but as an indicator that there isn't much civilian demand for large RWD sedans, leaving few choices on the market for the police who actually want cars of this sort. That being said, the Crown Vics tend to be pretty solid, durable cars -- not particularly outstanding or refined, or the most desirable cars in their class, but reasonably reliable.
Yikes. I thought their problem was from folks trying to race the cars?
Now that I think about it, that can't be right either; most of the GT350H's were equipped with automatics.
Speaking of rentals and bringing them back.....
I was in Tulsa one year ('89, '90?) for the Mid-American Shelby meet. Typically, the meet involves a day of open-track practice and time trials at Hallett raceway. I didn't have my Mustang ready for the event but, since it was open to any Ford powered cars, I rented a T-bird from Hertz and had at it.
A minor problem with brake fade( :surprise: ) sent me on one off-track excursion
Obviously, the guy in the Boss wasn't pushing it very hard...
And since I took the car to a car wash before returning it (for some reason, there was a fair amount of grass hanging from the under carriage), I suppose it could be said I returned it looking nicer than when I got it!
A fleet owner may buy a LS430 retail and put that in it's fleet for ultra-premium renters. that's much different than building half the output of an entire product line with the expectation that it will go to a fleet.
If finger pointing is necessary, the finger is pointed at ourselves. An American Auto giant is nothing more than people with fine educations from the best schools to average folks trying to make a living,who earned the job they have and their place in society. The Big 2.5 are not the enemies of society, they are generally highly motivated
people of every race and culture trying their best. They aren't interested in wasting their lives building inferior products anymore than you want to spend your hard earned money on one.
Jim P.
It amazes me that the Big 2.5 haven't used the rental market as an opportunity to get customers excited about their cars, rather than offering the opposite experience.
IMO, this provides an insight into the beancounting mentality prevalent in Detroit and Dearborn. Instead of using the rental fleet markets to promote their cars to the middle-class demographic whom they'd like to have as customers, they actually cheapen them to improve margins, forgetting that those improved margins come at the expense of a tarnished image. They apparently never learned that cost-cutting is a useful strategy to reduce a company's bleeding, but not the best method for growing market share.
Wow, so now I'm to blame for the Cobalt. Well, had anyone in Detroit bothered to ask my opinion, I would have advised that they do better well before the car was launched.
Americans have been voting with their dollars, and as a result, the market share is falling. The people have spoken, and if these companies are so arrogant and tunnelvisioned that they don't want to listen to the marketplace's feedback, then it's the fault of the companies, not the customer.
If the product isn't selling, then the problem lies with the company, not the customer. Blaming the customer may be fun, but it won't increase revenues or improve the bottom line.
They carry prisoners in the back seats.
>because its just big and very cheap.
I don't know how cheap they are. I don't follow the bidding int he city council minutes.
2014 Malibu 2LT, 2015 Cruze 2LT,
Ford Taurus / 101,416
Chevrolet Impala / 93,192
Chevrolet Classic / 92,544
Pontiac Grand Am / 75,819
Chevrolet Cavalier / 71,260
One point of interest is that GM kept the Grand Am and Mailbu (renamed "Classic) running in production after the launch of the new Malibu & G6. The Grand Am and old Malibu "Classic" were kept alive specifically for fleet sales and were not shipped to dealers. Once they come off fleet use, they will hit the general population as used vehicles though.
I believe Ford did the same thing with the Taurus after the launch of the 500 too.
I do see that they are making gradual changes to move away from the dependency on fleets, but the changes aren't severe or deep enough to create short-term benefit. It would take awhile to change perceptions. The more slowly they move, the longer it will take.
The cop-car version comes with modified suspension, high speed rated tires, HD electrical, HD engine cooling, HD transmisson oil cooler, and HO V-8 engines. Plus, those fancy flat-bench vinyl seats in the back.....The Interceptor makes for a very interesting used car buy though, and can be a fun car to have for a sleeper street car. Buyer beware though !!
Taxi cabs & municipal vehicles are more closely related to the every day driver Crown Vic.
The Ford Interceptor is the cop-car of choice across the USA, however, you will see Impala's & Intrepids in the mix too, along with Explorer's, Expeditions & Tahoe's. I've seen Camaro's & Mustang's in the past as well. I once got stopped by a full-size Chevy Van, that was indeed, a Police Cruiser.
Dodge is re-entering the market right now with a modified Charger for Police Cruiser duty.
The '06 Impala has been awarded "Fleet Car of the Year" by fleet Manager's across the USofA ! Good or bad for the cars reputation ? I can't say, but Fleet Manager's like it though, and I would assume quality and reliability are right up there with cost as a purchase decision.
CONSUMER REPORTS RECOMMENDS 13 GM VEHICLES FOR 2006 .... Consumer Reports Annual Auto Issue, which is on newsstands now, lists 13 out of 49 GM vehicles as "Recommended:" the Buick LaCrosse and Rendezvous, Chevrolet Impala, Monte Carlo, Malibu Maxx, Suburban and Avalanche, Cadillac CTS and STS, GMC Yukon XL, Pontiac G6 and Vibe and Saab 9-5. These vehicles represent twenty-seven percent GM's total models versus Japanese manufacturers with over seventy percent of their vehicles as "Recommended."
GM said - "Consumer Reports is one of the most influential sources used by consumers to make purchase decisions. GM's greatest challenge, to improve results in this publication, is consistent execution in performance, reliability and safety across all vehicle lines," said Jamie Hresko, GMNA vice president of Quality.
That is really far-fetched. There is a simpler explanation.
I think that I am like many consumers in US in regard to wanting to get the most value for hard-earned dollars spent. To get most value, need to be open-minded and get as much information and/or test-drive, demonstrations, hands-on, etc as possible to make informed decision.
I have purchased many new American brand vehicles in my life. I do recall trying out and taking a pass on very early Japanese cars in our country. As Japanese brands improved their quality and offerings, I as many, were eager to try them out when ready for next vehicle purchase. This happened to me in 1984. I was looking for a small 4-cylinder vehicle and test drove cars of similar engine size and body size from Honda, Toyota and the 3 American auto manufacturers. I was literally amazed at level of superiority of the 84 Honda over the domestics in all major vehicle attributes - fit/finish, engine, transmission, handling and feel, interior, paint, etc, etc. I bought the Honda, put on 195K miles and used it as a fourth vehicle in its last years. Sold it in 1998 to a contractor doing work on my property who spotted it in barn and asked to buy it. Contractor still comes out to do work for us.
I think that you will find similar stories (except for barn and contractor) from tens of thousands of Americans who merely have open minds and go out and try and then buy so-called "foreign" brands.
Is this what CR has stated? Do you have fact(s) to back this up?
Graphics, such as filled-in black or red circles, are much more powerful at conveying information than would be tables of numerical data. CR does explain what different types of circles mean in numerical sense. Would one rather see the DJIA expressed in a table of numerical values or in a line chart? I think that vast majority of folks would pick the line chart.
The line chart has an (infinite) large number of points representing the ebb and flow of the the DJIA; not just 5 points. If CU were to use a infinite scale then they would give the number for each of the points rather than half circles and full circles.
2014 Malibu 2LT, 2015 Cruze 2LT,
Did not say that. You are twisting my message. Let me try again. The point I made is that graphics are more powerful and easier to understand than a table of values. One could discern a direction/trend/etc in a DJIA year much quicker and easier in a graph than in looking at say a table of 52 numerical values. That's not to say that a person would exclude wanting to look at individual values in a table in correlation when looking at a graph.
In a similar fashion, when I look at an issue of CR (have 2003 at hand and will use in example), I see that Lexus LS400/430 has mostly full red circles, no full black circles and only one one-half black circle. In contrast, Caddy DeVille has some full black circles, many empty circles, some half black circles and smattering of full red circles and half-red circles. Just 2 seconds looking at each of these charts makes powerful statement about "relative" reliability of each of these makes through 2002. Of course, one would want to spend time and thoroughly read and absorb the circles for each and every reliability attribute for the vehicle brand of interest.
Good point !
I strongly agree with Lemko on this one. I would state that it has more to do with "one-upping the Jones'" or adopting a new identity. The purchase of a foreign car seemed to make a middle-class buyer feel somehow superior/unique to his/her middle-class neighbor in a Buick. Toyota and Honda are good cars, however, the quality difference between Japanese and US cars is much more perception than reality. It's amazing to me how vehemently buyers defend cars (foreign and domestic) even though they had nothing to do with the building, designing or testing of the car.