"There are two modes of acquiring knowledge, namely by reasoning and experience. Reasoning draws a conclusion and makes us grant the conclusion, but does not make the conclusion certain, nor does it remove doubt so that the mind may rest on the intuition of truth, unless the mind discovers it by the path of experience." --Roger Bacon: Opus Majus, trans. By R.B. Burke, 1928.

 

Bacon's quotation above might be modernized into today's jargon more aptly with Ford Marketing's new commercial that has swept the fancy of the country with "I didn't know that!" No wonder they broke the 'better idea' light bulb.

What a large number of industry and fleet men do not recognize is the total importance of fleet sales in this year's economy. An analysis is long overdue to view the current impact of fleet sales. For a number of years fleet sales have been a growing stepchild of the manufacturers. Way back in 1963 and 1964 fleet sales hovered just over the half million mark. Fleet departments were often manned with the near-retirement types in the auto companies. Marketing strategy was one of reaction to competition rather than a planned program.

The in 1969 fleet sales hit over the million mark. Since that time registrations for fleet cars have consistently been over the million mark and hit 1,200,000 last year. More in perspective, each fleet sale represented one of about every eight total sales for the manufacturer.

Recently, I asked a number of factory people about the purchasing habits for the '74 model year. None that I talked to could enlighten me. So we got the AF research department to tabulate the individual models by fleet sales versus total industry sales. The complete chart is published in this issue and rates study by all.

Now, we come to the part where you might say, "I didn't know that!" Interestingly, for the first six months of the current model year fleet sales accounted for 15.4% of total industry sales. That is at a rate of about one out of every six sold going into fleets. Wow!

Interestingly, fleet purchases of Regular (standard size) and Intermediates accounted for 70%  of all fleet purchases while total industry sales for these two model groups was only 55%. At a time when the big ones were gathering snow or dust in every conceivable dealer parking lot.

Now to all those screaming dealers who are not participating in fleet sales and think that NADA or someone should slap a wrist on distribution; the fact is that during this first six months of the model year fleets purchased just 23% of the Compacts/Sporty/Economy cars within the fleet mix. All this while total industry gobbled them up at a 38% rate. The fact is that there was nowhere near the switching taking place within the fleets as was shouted about.

Suddenly, we all began to see bright, vital men representing fleet sales at the auto companies. Allowance programs settled down with proper volume buying discounts and equitable compensations for variance in resale values. Car company marketing men began saying, "Darn if those fleets don't replace those cars on a regular basis, and in numbers; if the economy softens, the fleets still buy."

Keep in mind that most fleet men admit that all fleet sales are not recorded. The base is on 10or more purchases over the year in most instances and there is surely a great number going into smaller fleets. Also, some of the leased cars just do not show up on the report.

The fleet business is a mighty fine business. The next time you find one of those 'only-retail-minded' men, lay a few of the real figures on him. He just might say, "I didn't know that!"

 

About the author
Ed Bobit

Ed Bobit

Former Editor & Publisher

With more than 50 years in the fleet industry, Ed Bobit, former Automotive Fleet editor and publisher, reflected on issues affecting today’s fleets in his blog. He drew insight from his own experiences in the field and offered a perspective similar to that of a sports coach guiding his players.

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