Analyst Recommends U.S. Automakers Reduce Fleet Sales

American automakers General Motors and Ford Motor Co. could better revive their businesses by reducing the number of vehicles they sell to rental car companies and other corporations, according to a Monday report by Banc of America Securities.

Fleet vehicle sales are less profitable, taint a company's brands and, over the long term, reduce the value of the automobiles, Forbes reports.

It would cost the automakers tens of billions of dollars to fully restructure the businesses properly, as the Big 3 have publicly committed to doing.

Thus far, GM, Ford and even Daimler-Chrysler have simply focused on downsizing their respective businesses, rather than spending the money to eliminate brands and buy out dealers, says Ronald Tadross, an analyst for Banc of America.

Tadross contends that the solution with the shortest lead time is to cut back on fleet vehicle sales.

Honda, for instance, frowns on both corporate and rental fleet sales and it has the best retail value in the industry, the analyst said.

Indeed, while fleet vehicle sales comprise roughly 30 percent of U.S. sales for the Big Three automakers, they comprise 1 to 2 percent of Honda's and only 5 percent of Toyota's, according to the research firm.

Comment On This Story

Name:  
Email:  
Comment: (Max. 10000 characters)  
Please leave blank:
* Please note that every comment is moderated.

 
 

Newsletter: Sign up to receive latest news, articles, and much more.

Read the latest

Auto Focus Blog: A blog covering fleets, auto rental and the business of cars

Trump and Regulations: An Alt-Fuel View

With 2025 emissions targets back in review, manufacturers, alt-fuel, and alt-power suppliers weigh in on the potential impacts of Trump’s initiatives.

Why GM’s Telematics Announcement is a Really Big Deal

Enabling a telematics connection at the factory — and not through an aftermarket hardware installation — is a game changer for fleets.

Four Thoughts From the 2016 Conference Calls

Sifting through the notes of Avis Budget Group’s and Hertz Global Holdings’ recent fourth quarter conference calls give us some trend lines to watch out for in 2017. (Of course, this gives us an incomplete snapshot, as Enterprise Holdings is privately held.)

Job Finder: Access Top Talent. Fill Key Positions.

>