Ford Motor Company grew its fleet sales in the government and commercial sectors in 2006 while strategically reducing its presence in the daily rental market to improve the residual values of its vehicles, the company says in a recent press announcement. Ford anticipates an overall decline in fleet volume this year, but attributes it almost exclusively to a decrease in rental volume.
Ford increased its government sales by 15 percent in 2006, which led the industry. The company holds a 47 percent share of the segment. Ford led the domestic industry with increased commercial fleet sales of 8 percent in 2006. The company holds a 28 percent share of the segment.
By limiting its presence in the rental market, Ford is minimizing the price-cutting impact that ex-rental units have on new car sales.
Discontinued production of the Freestar minivan and previous-generation Taurus sedan will account for the majority of the rental decline in 2007, according to the statement. The 2006 Taurus, for example, was 100 percent fleet last year and represented a third of Ford's total rental volume.
In place of the Taurus, Ford is currently delivering a limited number of 2007 Five Hundred and Fusion sedans to the rental segment while maintaining its sedan volume in the commercial and government fleets.
In recent years, Taurus cars held only 30 percent residual value after 36 months due to its high volume rental presence. Comparatively, the Fusion, Five Hundred and Lincoln Zephyr/MKZ hold residual value between 45 and 50 percent after 36 months, because Ford has limited their volume in the rental market.
Another key to increasing residual values is putting the right equipment in rental units for maximum return at auction. Ford says it is aligning the rental unit content with retail customer demands. In response to customer demand for crossovers Ford Fleet is accelerating the migration of minivan fleet users to the Freestyle and Edge.