and THAT is why the big three have virtually eliminated fleet sales to rental agencies in the past two year. Entry sedans are just that, entry sedans. The Profit is in the options and in SUVs and loaded trucks. Ask a dealer to order you a base sedan. Your wait will be intolerable. It may not even be built. being (connected) to GM, I know. And a few dealerships I know have left fleet sales because they make NO money delivering fleet, not worth the time. You can't make money selling volume if there is no money to be made at any quantity.
Big 3 Production Cuts Mean Higher Prices For Rental Cars
As the nation's Big Three auto makers remake themselves into smaller, leaner companies, the rental car business is suffering collateral damage.
All three have cut production this year to bring supply in line with lower demand for their products, and further cuts are inevitable next year. They're also trying to wean themselves from rebates and other incentives to bring sales prices closer to the sticker.
That means fewer cars available for low-profit bulk sales to rental companies, and some industry analysts and rental company officials say that already has led to price increases at the airport service counter.
"I think they're going to have increased costs, which they will have to try to pass on," said Michael Millman, an analyst who follows the car rental business for Soleil Securities.
General Motors Corp. (NYSE:GM) (GM), the nation's largest auto maker, said last week its sales to rental car companies and other fleet buyers in October were down by 10, 000 vehicles compared to the same month last year. Company officials have predicted a reduction of 80,000 to 90,000 for the full calendar year, with the decline continuing into next year.
Ford Motor Co. (NYSE:F) (F) won't give specific fleet sales numbers until later in the year, but said they are up 9 percent in 2006 mainly to the phase-out of the Taurus model, which in its final year of production was sold primarily to rental companies. Ford expects fleet sales to drop next year without 175,000 Taurus models on the market.
DaimlerChrysler AG's (NYSE:DCX) (DCX) Chrysler Group also won't give out fleet numbers but said it had reduced them in October in line with a strategy to focus more on retail sales.
http://www.istockanalyst.com/article/viewarticle/articleid/2346373