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Nissan, Toyota increase fleet sales, but at what cost?

Nissan, Toyota increase fleet sales, but at what cost?

by Ben Hsu

January was a good month for both companies, but are fleet sales good for the long term?

Nissan and Toyota both started 2018 off with ace sales numbers, but as it turns out a large number of those orders may have been fleet sales.

As Bloomberg reports, Toyota's fleet sales jumped 69 percent in January, which translates to 24,281 cars, compared to the same time period in 2017. Over the same period Nissan had a smaller increase at 48 percent, but actual numbers were much greater, a whopping 41,550 cars.

Fleet sales are typically discounted volume orders delivered to rental car firms, taxi companies, government organizations or businesses. They are considered a "quick and dirty" way to boost sales numbers, but they often end up hurting the brand in the long run, especially as they flood the used car market and depress new car sales and turning existing owners off by lowering the resale values of their cars.

According to Bloomberg, "all but a few thousand were to rental-car companies," which typically are the most eager to dump the cars after a short usage period. It also hurts brand perception when potential customers see a particular marque dominating rental lots.

GM, once the darling of rental companies, said in 2016 they will resist fleet deliveries, even if it hurts their overall sales figures. FCA has pledged to do the same.

Image by Ben Hsu.