Fleet: The Other “F” Word
-Variance
May 3, 2006
Fleet sales have been a part of the automotive sales industry for some time. Typically, fleet sales are defined as car sales to companies rather than individual consumers. Rental car companies like Enterprise, Thrifty, etc. are usually the first things that come to mind when people talk about fleet sales. Some cars (more than others) are sold by automakers to fleet companies to contribute to their bottom line. In fact, Hyundai recently announced they were going to increase their sales to fleets in Europe to aid in the company’s growth.
Now, some people will say things along the lines of fleet sales don’t count or they aren’t real sales. Either that or that car companies should avoid them like the AFA avoids reality. For some reason, they are seen by some to be something to be ashamed of. To those of this opinion, I have one question:
Who the hell cares?
Sales Are Sales
One might say fleet sales are worth less than sales to individual customers. Technically, they have a point. Cars sold to fleets are typically sold at a discounted rate because they are bought in bulk. For instance, small businesses can purchase up to 4 vehicles at one time from GM and 5 or more can be sold to larger companies. As a result, companies gain less revenue on each fleet car sold and in turn make less profit on each car.
However, my feeling on the matter is that no matter what the profit margin, a sale is a sale. I mean, it’s not like the companies are selling them at a loss whoring them out like many “ladies of the night”. The car is built; if it gets bought, it’s a sale. Seems pretty cut and dry to me. I really don’t see how sales to...
• Construction companies/contractors
• Police departments
• Hospitals
• Fire departments
• The federal government
• ...and more...
...don’t count for anything. Which conveniently brings me to another point...
Fleet Sales Are a Necessity
Just what is any company supposed to do without fleet vehicles? Fleet cars and trucks exist because companies need them. How can a rental car company possibly exist without any cars to rent? How can a contractor possibly haul his equipment and otherwise conduct their business without a fleet of trucks and vans to do so with? The simple answer is: They can’t.
That’s why fleet sales exist. They give the hospitals the ability to rush Grandpa to the hospital after taking his Viagra (interpret that how you want). They give the police an important tool in fighting crime and in providing great footage for “Cops”. And where else are they going to get these vehicles except through purchasing vehicle fleets from automakers? And as car companies are of course in business to make money, they are of course all too happy to provide them with the ability to do so.
Besides, think about it: Horses are a bit unsuited to haul a contractor’s hundreds of pounds of building materials and tools, don’t you think? You’d probably kill them trying. Then you’d have PETA all over your ass. They’d call you a horse-murderer and print up T-shirts with your face with devil horns on your head on them. You don’t want a bunch of smelly hippies protesting, chanting and smoking weed outside of your home and/or place of business, do you? Well? Do you?!
Of course you don’t. That’s why we need fleet sales. So we don't have to deal with PETA.
Potential Positive Possibilities
One more thing I’d like to note that some people either forget or don’t realize to begin with is that the sales of fleet cars can yield some positive dividends for auto manufacturers that provide them. They have the potential to aid individual car sales in the long run. Let’s look at a scenario:
You’re out one night with a friend in your car. You’re shooting the breeze and having a good time ragging on your Physics professor that has a face that would make Michael Jackson say, “Damn, you’re jacked up.” The conversation then turns to drifting. Your buddy reckons anybody with half a brain can do what “professional” (his quotes) drifters do. You tell him it’s slightly more involved than he gives it credit for. He flat-out disagrees and says he can prove it. He tells you to find a vacant parking lot. You oblige and head to the mall which is closed at this time of night.
Arriving at the mall, he tells you step outside and let him drive. You do so. Now he says he can drive up and drift around a traffic island in the parking lot. Skeptical, you tell him to give it his best shot. He proceeds to reverse and then takes an aggressive running start. He jerks the wheel and pulls the handbrake to make the car slide. Much to your surprise, he indeed successfully drifts it around the island. Then to your horror, you watch as the car continues to slide and hit a second traffic island sideways, flipping the car and sending it tumbling over and over. It finally lands wheels down, completely totaled. Your buddy, dizzy but otherwise fine, lumbers out of your trashed vehicle and says “Did I f@#k up?”
Now minus one car and one friend, you need a new car. In the meantime, you’ll need to get a rental. You head over to your local rental car agency and make a request for a four-door sedan. The agent hands you the key to a Chevy Impala and sends you on your way.
Now generally, you don’t have high expectations of rental cars. In fact, you’re kind of indifferent about the whole thing. However, looking at the car, you notice it looks pretty good. It’s nothing exciting but it’s handsome. Heading out, you notice it has a pretty good ride and the power from the V6 is pretty good – better than the wheezy 4-banger that was in your murdered ride. You take note of all of the features it has and notice how much roomier it is than your old car. Overall, you come off impressed by the car and almost don’t want to give it back a week later.
The next thing you know, you’re in an Impala again. Only this time it’s yours. The Impala you rented earlier left such a good impression on you, you decided to buy one to replace your old car and you couldn’t be happier.
Basically, the moral of my mini-story is that fleet sales give the end-users of them the opportunity to experience them first-hand. Given a positive experience, there is a good chance the user will consider (and possibly buy) the same car (or brand) for themselves when in the market for one. The more exposure and chances a manufacturer gives people to do so, the better.
Freedom to Fleet
To summarize my point: “Fleet” is an “F”-word, but it isn’t dirty.