Chevrolet's Frink Assesses the 1990-Model Year

Chevrolet is forecasting a banner year for 1990 with its anticipated total fleet sales approaching the half-million mark. Spearheading this increase has been a significant jump in Chevrolet's passenger-car volume resulting from strong daily rental orders. Although retail sales have been soft this model-year, fleet orders remain strong industry-wide primarily because of the volume being generated by daily rental buy back programs which most car manufacturers are offering.

AF's Mike Antich recently interviewed George Frink, Chevrolet' s director of fleet sales, to get his perspective on the state of the fleet market at the start of the 1990 calendar year. Also discussed were Chevrolet's 1990 product lineup, the restyled 1991 Caprice, (debuting this spring), and the Lumina model line which is projected to account for more than 20 percent of Chevrolet's passenger-car sales in the current model-year.

AF: Presently, there is an industry-wide slump in retail sales of new vehicles. What effect, if any, has the current retail sales environment had on fleet orders?

Frink: At Chevrolet, we're ahead. I would say that the marketplace is running about even. At Chevrolet, our passenger-car sales are up significantly, while at the same lime our truck volume is down. This indicates that we'll have a repeat of what we often see; fleets that operate under expense budgets are in the market and capital budget fleets are pulling back. A high percentage of the fleet truck volume is still companies that operate under capital budgets such as public utilities. When things start getting a little tough, there is a tendency in business to tightly control expense budgets and make big cuts in capital budgets.

AF: What do you project fleet sales to be for Chevrolet for the 1990-model year?

Frink: Close to 500,000.

AF: What about industry-wide? What do you project overall fleet sales to be for the 1990-model year? Do you feel it will be on par with 1989?

Frink: I'd say a little bit ahead. All the manufacturers that have daily rental programs are recycling. I think sales are going to go up, but by no great magnitude. I would put the increase in the three to five percent range. This is the result of all the manufacturers designing their incentive programs to encourage cycling. When the whole thing washes out, I would guess that daily rental may be up 10 percent and commercial/government may be down five percent.

AF: What was Chevrolet's fleet sales breakdown between passenger cars and light-duty trucks in the 1989-model year?

Frink: Roughly, two-and-a-half cars to one truck.

AF: Did this increase from 1988? Or is this a static percentage?

Frink: At Chevrolet, it has been pretty much a static percentage. The crossover phenomena from car to truck that we're seeing in the retail marketplace has not hit the fleet market anywhere to the same extent.

AF: At the moment, Chevrolet is on the verge of producing more trucks than cars...

Frink: And if you pull fleet sales out, we are currently selling more trucks than cars at retail. In the retail marketplace, this crossover involves vans, sport-utilities, and pickup trucks. The only significant crossover in the fleet arena has been to minivans from station wagons and the old behemoth full-size cars. But this isn't a new phenomena. It's been with us for the past four or five years. In the fleet arena, we haven't seen the tremendous switch into vehicles like our S-Blazer, the S-truck, and our new C/K pickups as we've seen at retail.

AF: Chevrolet's General Manager-Jim Perkins has stated that his goal is to regain the industry's number one sales spot by 1990 or 1991. Has Chevrolet fleet been given specific sales targets to achieve this goal?

Frink: Everything we can sell. The idea of leadership, who sells the most, is something that interests those of us in the business. I don't know what it means to the public. I don't think it means a lot. We're looking to develop a winning feeling and part of winning is selling more than the other guy. We've got to be careful that Chevrolet doesn't solely focus on Ford, while a Toyota or Nissan goes by both of us. You've got: to look car line by car line and segment by segment. It's pretty broad based today. Maybe 10 or 15 years ago, the right thing to do was for Ford to focus on Chevrolet and Chevrolet to focus on Ford. But, in 1990 such a single purpose focus could get you in a lot of trouble.

AF: In April 1990, Chevrolet will be introducing the restyled 1991 Caprice. What will be the fleet allocation percentage for the Caprice?

Frink: There will be adequate availability for both the retail and fleet community. I do not anticipate any shortage for either.

AF: A police package will be introduced for the 1991 Caprice. What sales volumes are you anticipating?

Frink: We are going to announce the 1991 Caprice this spring but will not begin to produce the 9C1 and 9C6 police and taxi package until October or November. We will continue to build the 1990-model, the current Caprice police car and taxi, as long as we need to build it. If we need to build it into June or July to meet demand, we will. I'd like to say we'll do 20,000 to 25,000 police cars with the new Caprice. With the 1991 Caprice, you have a different car that has a lot of features/benefits added to it but at a little extra cost. Although the addition of air bags and anti-lock brake systems carry value, when you get into the police car arena however, you are often strictly in a price environment.

AF: As I understand your marketing plans for the 1991 Camaro special purpose package, it would be available to police departments as a pursuit unit?

Frink: Yes. The Camaro will be available with a package that allows it to be used as a pursuit unit, but it doesn't have the full-blown police car engineering we have in the full-size car. For example, the full-size police car has special seats, special floor mats, and other features that are designed to handle the severe usage required of a police car.

AF: Although there was limited availability of the Lurnina sedan in 1989, what was the model's sales volume for that model-year? What are you targeting as sales volume for the Lumina in 1990?

Frink: We've sold about 21,000 1990-model Luminas in what would normally be the 1989-model year.

AF: What are you targeting for the 1990-model year?

Frink: About 85,000.

AF: Recently, in an industry survey, the Celebrity was named by fleet managers as the second best fleet car in the market. Do you anticipate the Lumina achieving the same industry support? What has been the fleet reaction to the Lumina?

Frink: The fleet reaction to date has been very good. When the Celebrity first came out, it was marketed as the perfect fleet car and the Lumina comes to market as the new definition of the perfect fleet car. The car has been very well received and we're gelling good reports not only from the fleets but also from the drivers.

AF: What are you projecting fleet sales to be for the Lumina APV?

Frink: We have not sold too many because the model just started moving in volume. Our dealers are still barely sampling the product. We've shipped 2,000 to date and we have 3,600 orders. We expect to do about 15,000 for the model-year.

AF: Chevrolet will be introducing a four-door version of the S-10 Blazer for the 1991-model year. What impact will such a vehicle have in the fleet market?

Frink: It will have very little impact on the fleet market. The sport-utility market is very, very small in fleet. For example, the two-door S-Blazer had only 1,300 orders for the entire 1990-model year. Don't get me wrong, there are some niches for it out there, but there has not been any great shift into that type of vehicle by anybody.

AF: In addition to Chevrolet, you also market the Geo line. Chevrolet's goal is to sell 300,000 Geo models by the early 1990s. What is the fleet marketing strategy for the Geo line and what percentage has been allocated to fleet?

Frink: Frankly, because of the state of our business today, the only product where there is a shortage is the ZR-1 Corvette. Availability is almost a moot question. These vehicles are very important units in terms of merchandising with the primary application in the daily rental field. The Japanese and Korean importers are very active in that arena. There is a tremendous demand for subcompacts in daily rental. I would say fleet would account for upward of 25 to 30 percent of the Geo volume. Almost all of this would be daily rental.

AF: In the past several years, Chevrolet has revamped its fleet marketing and customer service efforts. Will Chevrolet be introducing any additional fleet support or marketing programs for its customers in 1990?

Frink: I think 1990 will be a year of making what we have work better. We've been very pleased with the changes we've made in our fleet service operation. We've been very pleased with the telemarketing fleet command center approach for the smaller accounts. We feel we've opened lines of communication that were almost impossible to maintain when we were trying to call on 18,000 to 20,000 accounts face to face. Our customers now have an 800 number and we've been able to stay in contact: with everyone in our database at least twice a year. The whole mood of the telemarketing group is positive. When we went into telemarketing I was scared to death that we were building a customer complaint center. Less than four-tenths of one percent of the incoming calls are complaints. Frankly, our track record on getting problems fixed almost immediately is pretty damn good. Once you're aware of a problem, it's pretty easy to fix. All and all, I'd give our fleet service operation reasonably high marks.

AF: Looking back on the 1989-model year, what were the big fleet buys for Chevrolet?

Frink: Our biggest, single commercial buy was Xerox. Looking back on 1989, it was not a vintage year. Frankly, it was a tough year. We were selling an eight-year-old Celebrity into a marketplace that, at that point, was dominated by Taurus.

AF: Are there any other comments you would like to make in regards to the fleet marketplace vis a vis Chevrolet for 1990?

Frink: The fleet market is going to be a terribly competitive environment which works to the benefit of the customer. We have to listen to the fleet customer and do everything we can to make our products more attractive to that marketplace in terms of programming, services, and product.