We have been extremely interested in the evolution that has been taking place in the leasing industry during the past few years that affects management of the business-type fleet.

Today better than 60 percent of the larger size business fleets are at least partially on some kind of lease. Additionally, about three-quarters of these leases are of the finance-lease type. Couple these facts with a very real shakeout of the marginal (and some of the better known names) companies and you find a pretty typical industry that continues to blossom but is beset with the growing pains of a healthy birth.

If you will read and review the two key interview stories in this issue that reflect industry observations by schoen and the ambitious objectives of Smith, you will better understand that, not unlike any important business, it still requires an excellent product and or service along with outstanding guidance and direction by unselfish leaders to maintain the respectable place that has been set.

We could easily have written these paragraphs about the problems that continue to face the industry … the high rates for borrowing money, the shortage of experienced personnel, depleting used car prices, changing factory policies, the plight of the existing fleet managers … but after sitting in with two of the industry’s key leaders leads us to believe the leasing business is probably long overdue for an earned pat on the back.

In the next few months we can expect to hear loud and clear voices from NADA on the question of discounts (or the ‘bad’ word, subsidies) for fleet purchases.

GM has now rejoined the other majors with a sound and competitive plan in this area for the first time since 1958. There remains little doubt that this action has been taken to combat increased success in the market place by their competitors.

As any good businessman would react, GM has reached a point where to continue with some kind of righteous or “head in the sand” attitude would surely cost them sales and loyalty in addition to a share of the market that they have coveted and cherished as we do our position in the publishing business.

While they have been successful in avoiding it for some years, sheer competition dictates a move that may cut in slightly from shareholders’ dividends.

NADA will shout, establish committees, and call for reversal even though little has been heard from them during these prospering and record new car sales years as the other three auto companies have continued with their fleet subsidies to remain competitive.

Yes, there will now be cries of “foul.” And they will be loud!

The simple facts are contained in our free enterprise system. The dealer that does not understand or accept fleet discounts (probably because he is not engaged in fleet business) is the same dealer who buys a case of motor oil instead of by the can … because of the discount … and ultimate profit for him.