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Chrysler Plans Further Cuts in Fleet Sales

January 16, 2008

Chrysler LLC expects its domestic market share to fall in 2008 as it pares sales to rental-car companies to focus on selling vehicles to consumers Bloomberg News reports.

Chrysler had 12.9 percent of U.S. auto sales in 2007, according to Autodata Corp. That ranked it No. 4 in the United States, trailing General Motors Corp., Toyota Motor Corp. and Ford Motor Co.

Cutting discounted sales to business customers such as rental car companies would help Chrysler boost profit margins and raise the resale value of vehicles bought by consumers. Chrysler plans to trim so-called fleet purchases to about 20 percent of total sales, from about 30 percent in 2007.

While Chrysler trimmed some fleet sales in 2007, this year's decline will be larger, Chief Executive Officer Robert Nardelli has said.

That strategy echoes the steps taken by Ford and GM to reduce their dependence on corporate buyers last year, when the automakers blamed most of their U.S. market-share declines to Japanese rivals on fewer fleet sales. Toyota and Honda Motor Co. typically don't rely as heavily on fleet sales.

Ford's share of domestic sales of its U.S. brands slid 1.6 percentage points to 14.8 percent as Toyota rose to second in the U.S., and GM dropped 0.8 point to 23.5 percent, according to Autodata.

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