Ed Bobit's Publisher's Page
First off, we cannot locate even one manufacturer who will stand behind the statement. That is because their research results are similar to ours at AF. The fact is we are currently running at a fleet sales level of about 1.4 million new cars this model year compared to a total sales level of over 10 million. So one out of every eight cars goes into fleet. That is about 12½ to 13-percent for fleet.
The press must also be accountable. It must be accountable to society for meeting the public need and for maintaining the rights of citizens and the almost forgotten rights of speakers who have no press. It must know that its faults and errors have ceased to be private vagaries and have become public dangers. -Commission on Freedom of the Press: A Free and Responsible Press, University of Chicago Press, 1947.
There is a recurring quote that has been appearing for the past year that everyone in our industry has surely seen by this time. It usually reads something like this, "According to sources in Detroit, manufacturers estimate that nearly half of the new cars in 1980 will be leased rather than sold."
Don't be misled by this kind of press.
Since most of us have friends and business associates who depend on us to keep them informed about the market, we should set the record straight. It could happen, but it is highly unlikely. First off, we cannot locate even one manufacturer who will stand behind the statement. That is because their research results are similar to ours at AF. The fact is we are currently running at a fleet sales level of about 1.4 million new cars this model year compared to a total sales level of over 10 million. So one out of every eight cars goes into fleet. That is about 12½ to 13-percent for fleet.
Now, any cub reporter should know that all fleet sales do not go into leasing; there is still a significant number of fleets that remains company owned; and one heck of a lot more that are under a management contract for their cars. No one is positive about the percentage, but leasing surely accounts for less than 10-percent of the fleet market today. After charting out the growth, it appears that leasing continues to make a strong overall increase of 15 to 18-percent each year.
While it is true that individual leasing is climbing at a much higher rate than fleet leasing, the base is much smaller and the potential greater, thus, a higher growth rate natural. Both fleet and leasing are enjoying solid growth. But the next time you hear or read that 50-percent of the cars will be leased three years from now, you have a perfect right to inform the 'source' that it's a lot of blue sky.
Have you had an opportunity to analyze the results of AF's second annual Fleet Dealer Awards? Comparing the 33 leading dealers (first, second and third place winners) from one year to the next, it appears that they accounted for 63,000 fleet sales in 1975; and a whopping 84,000-plus in 1976. Even though the fleet sales market as a whole increased, the percentage of increase for these 33 dealers is dramatic. An observer might surmise that, not unlike the leasing companies, the 'big get bigger.'
Today, most industry people consider five to ten thousand fleet sales by an individual dealer to be substantial. With the growing (and significant) trend toward single dealer source fleet purchasing by the major lessors, it is entirely possible that a single dealer will be accounting for twenty to twenty-five thousand fleet car sales within the next few years.
If and when that does happen, you can imagine the bartering power of the buyers and the attention that those dealers will receive from the factory.
The necessary ingredients to make it possible are the same ones that exist today. Service and efficiency. Those dealers who run their fleet offices without personalize service for every transaction or who are not equipped to handle volume paperwork will not be at the head of the pack.
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