Chrysler CEO Insists High Fleet Sales Not “Dirty Secret”

Aug 19, 2010

Chrysler CEO Sergio Marchionne complained bitterly earlier this week about Automotive News coverage that said much of the Chrysler sales recovery in recent months is based on an unusually high reliance on fleet sales, reportedly around 39 percent of its total sales — a number Chrysler won’t confirm or deny. In particular, he objected to an indirect suggestion that fleet sales are a dirty little secret.

“To suggest that fleet sales is sort of a dirty word is a bizarre concept,” he said in an Aug. 9 conference call with analysts and reporters. He said in several different ways he took exception to calling fleet sales “dirty.”

Marchionne correctly pointed out that Chrysler is hardly unique in selling plenty of cars to fleets, and he said that money from fleet customers is just as good as anybody else’s.

Marchionne’s reaction aside, what’s important about fleet sales is that they’re typically less profitable per unit than sales to individual retail customers.  Precisely how much less profitable fleet sales are is a closely guarded secret. For that matter, per-unit profits are a trade secret all around, for fleet or for retail sales.

Within the fleet number it’s also important to distinguish between sales to government and commercial fleets, which are said to be relatively profitable, versus sales to daily rental fleets, which aren’t.

To be precise, Marchionne’s reaction this week wasn’t to the story itself, it was in response to a video promotion over the weekend for Monday’s print and online issue of Automotive News. In the promotion, which was e-mailed to subscribers who had opted-in to get the weekly blurbs, Editor Jason Stein called fleet sales a “dirty little word in the sales recovery of 2010.”

[via BNET]

(Tags: Fleet Sales, Chrysler, Sales)

Photo courtesy of Steven DePolo and re-used under the Creative Commons license.