The Car and Truck Fleet and Leasing Management Magazine

OK Factories, Time To Improve Residuals

March 2002, by Ed Bobit - Also by this author

We never know the worth of water 'til the well is dry.-English Proverb

Not everything that can be counted counts, and not everything that counts can be counted.-Albert Einstein

Today we are afraid of simple words like goodness and mercy and kindness. We don't believe in the good old words because we don't believe in good old values anymore. And that's why the world is sick.-Lin Yutang

I'd rather have roses on my table than diamonds on my neck.-Emma Goldman

 

My interests ran the gamut. They range from hunting and fishing (with my buddies), to music, sports, good dining and fleet people.

In there somewhere is marketing that draws out your best creative thinking from knowing the buying influences to the statistics that record key history.

Now most of you know I've been harping on why the majority of fleet buyers ignore the resale realities of the transaction. Frankly, I've always directed my remarks to the buyers. The charts here point to a different compass point. The manufacturers.

While comparing the six high volume fleet models to the four offered just three or so years ago, keep in mind that many purchases are now "trucks'" to have the numbers make sense.

The obvious thing to do is to pencil in the original cost of that "97 vehicle and find the residual selling price for it in "00. It should shock you if you then compare similar numbers from five to seven years ago. Your company is well aware of the bigger hit.

Factories are aware of these models heavily designed and marketed to fleets. So much so that most sell nearly half of all production to fleets. These huge numbers tend to make the car more "mundane," less desirable at resale and less "special" to the driver.

The average age of corporate America's employees is27. Why not design and sell two badges instead of one? Why not make one model a sharp sports sedan? Get each account with a selector with some excitement for the product and watch the residual point hit the peg.

 

Manufacturer/ModelTotal FleetTotal Retail% of fleet vs. toal
1997 Intermediate Cars   
Chevrolet Lumina103,436228,45145.3%
Doge Intrepid64,322118,53754.3%
Ford Taurus165,035357,16246.2%
Mercury Sable60,720112,40054.0%
    
2000 Intermediate Cars   
4-door Chevrolet Impala48,055120,17428.6%
4-doorChevrolet Lumina
39,6005,54487.7%
4-door Dodge Intrepid
69,55471,18249.8%
4-door Ford Taurus
172,135178,37449.1%
4-door Mercury Sable
34,06956,6437.6%
4-door Pontiac Grand Am
43,92274,29637.2%

 

 

 

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