OEMs Talk Fleet at NAFA
Auto manufacturers report on how viability plans, dealer reductions and new technological developments will affect the fleet market. Both GM and Chrysler say they can be profitable with 10 million in total yearly sales.
Mike Antich, editor and associate publisher of Automotive Fleet, moderated the OEM panel discussion of fleet representatives from eight manufacturers at the NAFA Fleet Management Association’s 2009 Institute & Expo in New Orleans.
A panel of auto manufacturers convened during the NAFA Fleet Management Association's 2009 Institute & Expo in New Orleans to share insight into the present state of the auto industry and matters relating to fleet.
Representatives from General Motors, Ford, Chrysler, Toyota, Volvo, Mercedes Benz, Honda, Subaru and Audi were present for the OEM Panel Session on Monday, April 27.
Viability Plans and Fleet Sales
Jim Campbell of General Motors said the automaker is regrouping around its core brands of Chevrolet, Buick, Cadillac and GMC. Though Pontiac is being phased out, Campbell said Pontiacs will be serviced by a network of Buick and GMC dealers. GM anticipates a "solution" for Hummer in the next 90 days and has "interested parties" for a Saab sale. GM announced after the conference that it intends to sell the Saturn brand later this year.
Campbell said GM is looking to pull ahead fleet orders before the recently announced 11-week assembly plant shutdown.
Under the latest viability plan, Campbell said GM can be profitable with 10 million in total yearly sales.
Mike Ring of Chrysler reported progress on Chrysler's viability plan that started 18 months ago, including a fixed cost reduction of 35 percent. Chrysler closed the Newark, Del., plant that made Aspen and Durango.
Ring said Chrysler fleet sales are off 40 percent, though the manufacturer has gained 2 percent in fleet sales share.
Similar to GM, Ring said Chrysler can be profitable with 10 million in total sales.
Ford expects a 35 percent drop in commercial fleet sales for 2009, with a faster recovery than overall sales in 2010, said John Ruppert of Ford.
Ruppert said factors that will affect fleet purchases moving forward include corporate restructuring, the credit crunch, decisions as to who deserves a fleet car ("fleet rationalization") and the resizing of fleets to smaller vehicles.
Paul Jontig of Toyota reported that overall fleet sales were down 10 percent in 2008, mostly due to a reduction in rental fleet sales. However, in 2009, fleet sales are up 9 percent year to date. Jontig said Toyota's goal is to increase fleet sales by 20 percent, with a strong focus on hybrid sales.