Detroit 3 Slash Sales to Fleets

Despite a brutal retail sales slump, the Detroit Three continue to cut the number of light vehicles they sell to daily rental companies, Automotive News reports.

Through the first four months of 2008, General Motors, Ford Motor Co. and Chrysler LLC have reduced U.S. sales to fleet buyers, according to an analysis of data supplied by R.L. Polk & Co., an automotive data research firm in suburban Detroit.

Through April, Chrysler reduced fleet sales by about 45,000 units, or 17 percent, from a year earlier. GM cut fleet sales by nearly 40,000 units, or 14 percent. And Ford Motor's fleet sales fell 25,000 units, or 9 percent. Automakers consider it important to limit such sales because heavy fleet sales can damage a brand's residual values. Fleet sales to corporate customers can be profitable, but sales to daily rental fleets typically are not.

In previous downturns, the Detroit Three sometimes dumped unwanted vehicles into daily rental fleets, ruining resale values when Hertz, Avis and others sent their cars and trucks to auctions.

According to Automotive News, as the Detroit Three reduce fleet sales, other automakers are stepping into the gap. For example, Toyota's estimated fleet sales rose about 10,000 units to 85,000 in the first four months. That's 11 percent of Toyota's total sales, up from 9 percent a year earlier.

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