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The Impact of Fleet Sales on the Automotive Industry | Elio Motors

It does not take an automotive insider to know that the automotive industry celebrated a banner year in 2015. However, the media largely ignores a major segment of those sales, even though they represent a major benefit to both businesses and automakers. At least one estimate shows that sales of fleet vehicles make up about 20 percent of overall auto sales.

Fleet sales include discounted pricing on a set number of vehicles that companies find useful to their business. However, they were not always an attractive proposition and even earned an unfavorable reputation for a time. Amid the recession, a few years before auto sales began to regain strength, fleet sales were actually harming manufacturers. When the economy took a downturn, consumers held on to their vehicles longer instead of walking into showrooms. Manufacturers were making fleet sales at a discount and not selling vehicles to everyday consumers. This ill-fated combination made automakers re-think their position in terms of sales to fleets.

 

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Luckily, resurgent auto sales have also led to better fleet sales. When conducted correctly, fleet sales are beneficial to both parties involved. The automaker receives high volume orders, which boosts its overall sales figures. No varying trim packages are necessary, as the company typically wants a uniform fleet for its business. Additionally, the company benefits because it is able to purchase the vehicles it needs at a discounted rate.

If police cars look uniform in their appearance, for example, that is not a coincidence. As the LA Times has reported, automakers are vying to provide fleets to police departments across the country. TO the automaker, this offers not only financial benefits, but it also provides a subtle means of advertising through exposure.

There are three major segments that potentially use fleets of vehicles: governmental agencies, rental companies, and small businesses. Governmental agencies vary widely in their use of fleet vehicles. A fleet of police cars has a distinct purpose that differs from that of parking meter attendants or utility vehicles. Rental companies typically will need a diverse fleet to satisfy their customers’ needs. Family travelers need minivans, while business professionals often need something more compact. A small business that sends an employee on long trips may purchase a fleet of smaller, fuel-efficient vehicles or a local courier service may purchase unique-looking vehicles and add graphics so that they act as rolling billboards.

It seems that the automotive industry has begun to take note of the variable nature and endless possibilities of fleet sales. In fact, according to AutoNews, part of the reason for resurgent fleet sales has been that automakers have “introduced better cars that both retail and fleet buyers actually want.”

Fleet sales may not often make headlines, but they represent a sizable amount of total auto sales. A large number of fleet sales is beneficial to automakers, but can also be a major benefit to small businesses. In the past, automakers produced many vehicles that were not ideal for fleet purposes and the ramifications were duly felt. Now, more than ever, small businesses, government agencies, and rental companies can find vehicles that fit their exact needs.

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