Toyota Getting Numbers Boost from Fleet Sales
The sharp increase in Toyota fleet sales is a big change for the Japanese automaker, which has long shied away from that market because it’s less profitable than sales to individual drivers. For their part, Toyota may be getting a numbers boost from fleet sales, but the company says sales to rental agencies aren’t a long term trend for the brand.
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UPDATED: Jan 19, 2021
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We spent much of 2011 watching Toyota descend into what we’d term as a bit of a funk. The Japanese company went from being the world’s top automaker to a fourth place finish, behind General Motors, Volkswagen and the Renault/Nissan joint venture.
And then last week, Toyota reported their January 2012 sales numbers. Their increases in December and the first month of the new year made it seem as though sales for Toyota were back in high gear.
With a January total up 7.5 percent over a year ago, based largely on increased demand for their bread-and-butter Camry and the multiple hybrids they offer, and a slight uptick as the year closed out, maybe, just maybe, 2012 would prove to be much better than the year before, where Toyota suffered a nearly 7 percent decline in year-to-year sales.
But are the Toyota numbers from January indicative of a turnaround?
If the numbers Toyota sold in fleet sales – meaning cars being delivered to rental car companies in January – their U.S. sales would have been up less than a single percentage point. Toyota sold nearly 50 percent more cars to rental agencies in January than they did a year earlier.
Fleet sales have never been important to Toyota, and the company has normally avoided getting into them, unlike U.S. automakers GM, Ford and Chrysler.
Compared to selling cars to individual consumers, fleet sales don’t generate high levels of profit, and they have long been considered a negative in terms of branding and image, since cars sold to fleets will flood the used car market.
The sharp increase in fleet sales is a big change for the Japanese automaker, which has long shied away from that market because it’s less profitable than sales to individuals.
For their part, Toyota says sales to rental agencies aren’t a long term trend and should wind down after March. They’re simply making up for contractual obligations they couldn’t meet in 2011 after the earthquake that shuttered many of their factories.