Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, July 17, 1993 TAG: 9307170078
SECTION: BUSINESS PAGE: A8 EDITION: METRO
SOURCE: Associated Press
DATELINE: DETROIT LENGTH: Medium
That's one reason Chrysler's new trio of midsize sedans - the Chrysler Concorde, Dodge Intrepid and Eagle Vision - are scarce on airport and hotel rental lots.
Chrysler Vice President of Sales Tom Pappert said only 10 percent of all the sedans are sold to fleets. Fewer than 2,500 of the new sedans have been sold to rental companies. Of those, 1,000 were early models tracked closely for driver reaction.
During the recession, each of the U.S. Big Three sought to hold market share by boosting sales to rental companies. Chrysler, General Motors Corp. and Ford Motor Co. all have cut back as sales by dealers have improved.
"Chrysler is no longer playing the share game," Pappert said.
Auto Rental News estimates GM planned to sell 540,000 vehicles to rental companies in the 1993 model year, down 30 percent from 1992; Chrysler planned to sell 150,000, down 28 percent. Ford planned to sell 390,000 to rental agencies, down 7 percent.
GM, which has been the most dependent of the Big Three on fleet sales, plans further cutbacks next year, according to J. Michael Losh, vice president of sales, service and marketing for GM's North American Operations.
It wasn't long ago that fleet sales sustained a weakened domestic auto industry by artificially boosting demand.
The rental cars turned over quickly, clogging the market with cheap, low-mileage used vehicles. The cars were repurchased by the automakers after as little as three months in service, then sold at auction as used "program" cars.
That was a bit self-destructive for the manufacturers. First, they sold the autos at deep discounts, then they took losses on the auction of repurchased rental cars. Demand for new cars, already depressed by the recession, was hurt further because the nearly new ex-rentals were thousands of dollars cheaper.
Big Three executives say the rental business is still important. They will sell more than 1 million vehicles to rental fleets this year. At the peak of the recession in 1991, they sold more than 1.4 million vehicles to daily rental companies.
"We want to continue to do business with them in a big way," GM's Losh said earlier this week. "No one should think that we think the fleet business is bad. What happened over time is that we got into it on too heavy a basis, too costly a basis."
by CNB