Nissan In Sync With Fleet Sales
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Nissan's presence in the U.S. daily rental fleet business is rising, and Nissan North America Chairman Jose Munoz says that's a good thing.
Munoz made the defiant declaration partly in response to criticism from competitors about Nissan North America's overall market share growth. Detractors have commented -- usually in hushed tones -- that Nissan's climb to a 10 percent U.S. market share has relied on increased sales to rental fleets rather than organic demand from retail customers.
Munoz's message? Yes, of course, it includes fleet sales, he says. And no, there's nothing wrong with that.
"I guarantee you that every fleet sale we do in the United States is a profitable sale," he said, or the company wouldn't do it. "In many regions of the world, the best corporations are also the best in fleet. The important thing is to do responsible fleet," he said.
Automakers face a difficult task in calibrating their fleet strategy. Heavy sales to daily rental agencies boost volumes up front, but the effects tend to surface a few years later in the form of bloated used-car inventories that can depress resale values and transaction prices. That dynamic has kept Honda largely out of the rental business and led industry watchers to be wary of fleet-driven sales gains.
Munoz also notes that the fleet business is competitive and says that some of his competitors have been unsuccessful at capturing the business.
Munoz says Nissan is not trying to outsell anybody in fleet, but he wants to increase activity where it's profitable, particularly in corporate fleet sales. Those are dealer sales of multiple vehicles to companies with specific model needs -- for example, a fleet of small cars to a national pharmaceutical company.
"It all depends on your strategy on how you go to market and what features you use," Munoz said. "Some fleet sales might not be as profitable, but they are still good. They allow customers who don't know your brand to drive your car and see what you're doing."
Nissan is coincidentally trying to step up its involvement in commercial-vehicle fleet sales with vans and pickups through a portion of its retailers, though those vehicles still represent a small fraction of the total activity.
"It takes the investment to have the capacity to be in this business," he added. "Others may decide not to invest and to sell only retail. We're committed to this market and we see the potential."
Munoz made the defiant declaration partly in response to criticism from competitors about Nissan North America's overall market share growth. Detractors have commented -- usually in hushed tones -- that Nissan's climb to a 10 percent U.S. market share has relied on increased sales to rental fleets rather than organic demand from retail customers.
Munoz's message? Yes, of course, it includes fleet sales, he says. And no, there's nothing wrong with that.
"I guarantee you that every fleet sale we do in the United States is a profitable sale," he said, or the company wouldn't do it. "In many regions of the world, the best corporations are also the best in fleet. The important thing is to do responsible fleet," he said.
Automakers face a difficult task in calibrating their fleet strategy. Heavy sales to daily rental agencies boost volumes up front, but the effects tend to surface a few years later in the form of bloated used-car inventories that can depress resale values and transaction prices. That dynamic has kept Honda largely out of the rental business and led industry watchers to be wary of fleet-driven sales gains.
Munoz also notes that the fleet business is competitive and says that some of his competitors have been unsuccessful at capturing the business.
Munoz says Nissan is not trying to outsell anybody in fleet, but he wants to increase activity where it's profitable, particularly in corporate fleet sales. Those are dealer sales of multiple vehicles to companies with specific model needs -- for example, a fleet of small cars to a national pharmaceutical company.
"It all depends on your strategy on how you go to market and what features you use," Munoz said. "Some fleet sales might not be as profitable, but they are still good. They allow customers who don't know your brand to drive your car and see what you're doing."
Nissan is coincidentally trying to step up its involvement in commercial-vehicle fleet sales with vans and pickups through a portion of its retailers, though those vehicles still represent a small fraction of the total activity.
"It takes the investment to have the capacity to be in this business," he added. "Others may decide not to invest and to sell only retail. We're committed to this market and we see the potential."
