Ed Bobit: Read My Lips....

If you are fortunate to have raised six kids (as I have), it's not the "terrible twos" you remember so vividly, but the "terrifying teens'" that really get to you. You often find out that it may be too late to get their full understanding; their values are decidedly different and communicating seems lo be an insurmountable task.

Well, the "kids" are now active and responsible adults and it's funny how much smaller they've suddenly become when facing life land the real world) on their own.

Sometimes it just means keeping things in perspective, which is something a lot of people ought to do when talking about the fleet market.

To anyone who monitors vehicle marketing it would appear that some of the auto companies have persistent problems with the fleet market. Likewise, it's time to put this into perspective since I keep reading and hearing comments that do not equate with the facts.

Many of the senior execs at the auto firms used lo come out of sales. Today, it is not unusual to find their backgrounds are in finance, accounting, or engineering. Whatever their experience, they are basically "wholesale" (although most call if "retail") oriented since every vehicle sold, goes through an authorized dealer. Invariably "fleet" is only spoken when dealers are having a poor economic period. That's when management says, "Turn on the faucet - we'll sell the high inventory to fleets."

Now follow me through the fundamentals of "Fleet 101." In the 1992-model year, the rental companies purchased well over a million cars. The Commercial segment (along with their lessors) purchased just about half that amount. Interestingly, the manufacturers (and their dealers) individually leased more units than the Commercial fleet segment bought.

Keep in mind that the total "fleet" sales represented nearly 40 percent of all sales, in some cases. Some experts estimated that at the height of the rental flush (when rental buyers cycled as much as three times year courtesy of the makers), there was a "subsidy" or "loss" of $3,000 a car. Now, marketing sanity is returning to the rental market.

Of course, "rental" is considered fleet, but my point is between Commercial fleet and factory/dealer individual (consumer) leasing. Currently, Mercedes is touting a three-year lease with what amounts to a 1.3 percent interest rate: and $199/month retail leases abound for some mid-size cars. These subsidies, in any form, are called subvention. These are direct-support monies that are taking the place of the old and tired rebates.

Now, compare the fleet buying incentives for Commercial fleet managers. Unless you've got a very large fleet and keep a narrow selector list that earns you some "rifle shot" deal, you know that most allowances range from $300-$800 on even cool models. Factory fleet departments conduct their volume business with a relative handful of personnel and budget. Their promotional budget is a minute fraction of that of retail. I'd love to see retail's real costs for dealer support, district managers' time, and all the regional and home office people costs that should go into the true cost of a retail sale or consumer lease. You can bet the farm that it far outstrips a fleet sale.

So the next time some exec sounds off disparagingly about fleet sales, simply ask that rental and consumer leases be considered separately or urge them to distinguish them from the Commercial segment.

All fleet business is good business or the makers wouldn't participate. And it's honorable as hell compared to retail sales and consumer leases.