atomcat68 Posted January 3, 2016 Share Posted January 3, 2016 (edited) http://www.wsj.com/articles/jeep-boosting-sales-to-car-rental-firms-1451349252?ru=yahoo?mod=yahoo_itp Uh,oh! Should you really do this with the brand that is your bread and butter? edit: Maybe my head line is misleading. Jeep is increasing the amount of rentals by 50%. The majority are still sold to consumers, but my point is that this is a very disturbing trend. They will end up making the only brand really holding the company up less valuable. Edited January 3, 2016 by atomcat68 Quote Link to comment Share on other sites More sharing options...
probowler Posted January 3, 2016 Share Posted January 3, 2016 They're slowly killing the Jeep legacy with these new vehicles, this is just speeding up the process. Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted January 3, 2016 Share Posted January 3, 2016 How many people do you really think care about that "legacy"? I know I sure don't. All I care about is the past 5 or 10 years. Anything before that is irrelevant to me. Quote Link to comment Share on other sites More sharing options...
robertlane Posted January 3, 2016 Share Posted January 3, 2016 FCA needs cash - and lots of it really soon. Quote Link to comment Share on other sites More sharing options...
atomcat68 Posted January 3, 2016 Author Share Posted January 3, 2016 FCA needs cash - and lots of it really soon. I agree. This is the motivation, but this is a very short sighted bandaid that will cause catastrophic damage later on as Jeep becomes less of a profit generator for FCA. Quote Link to comment Share on other sites More sharing options...
Anthony Posted January 3, 2016 Share Posted January 3, 2016 (edited) 11.2% of Jeeps go to rental companies. That's ~90% retail. That being said, the increase is pretty much explained in one paragraph in the article (note they don't include 2012 or 2013 numbers to indicate if 2015 is an anomaly or not) Fiat Chrysler spokesman Ralph Kisiel said the small Jeep Cherokee crossover, introduced in October 2013, also wasnt included in the 2014 model years contracts with rental agencies, which are typically completed in August. Because they were included in 2015 contracts, it led to a sizable increase this year. Let's also not forget that through October (the timeframe referenced in the article) Jeep had sold more than 130k more vehicles YTD over the prior year. Naturally more vehicles are going to go to rentals just to maintain a percentage. I'm honestly think the big story in that article should be the massive rental cuts from Chrysler and Chevrolet. Edited January 3, 2016 by Intrepidatious Quote Link to comment Share on other sites More sharing options...
CurtisH Posted January 3, 2016 Share Posted January 3, 2016 11.2% of Jeeps go to rental companies. That's ~90% retail. Uh, no it isn't. If 11.2% go to rental fleets, we still need to know how many go to government and commercial fleets. Quote Link to comment Share on other sites More sharing options...
Anthony Posted January 3, 2016 Share Posted January 3, 2016 (edited) Uh, no it isn't. If 11.2% go to rental fleets, we still need to know how many go to government and commercial fleets.Very true. Though I doubt you see many of either. Edit: actually, IIRC the Patriot seems to be popular with security guard companies. Edited January 3, 2016 by Intrepidatious Quote Link to comment Share on other sites More sharing options...
probowler Posted January 3, 2016 Share Posted January 3, 2016 How many people do you really think care about that "legacy"? I know I sure don't. All I care about is the past 5 or 10 years. Anything before that is irrelevant to me. There's a name for that: "Fake Jeep people".... Buying Jeeps Quote Link to comment Share on other sites More sharing options...
bzcat Posted January 4, 2016 Share Posted January 4, 2016 Now that rental car companies are not owned by Big 3, they care about resale value of their assets. So naturally, they want to increase the % of SUVs in their fleet which gives them better protection on residual values. Plus that's what people like to drive/rent so rental companies can earn more money. Quote Link to comment Share on other sites More sharing options...
bzcat Posted January 4, 2016 Share Posted January 4, 2016 (edited) I'm honestly think the big story in that article should be the massive rental cuts from Chrysler and Chevrolet. A lot of it is smokes and mirrors. Chrysler reduction is probably related to Jeep and Dodge increase, and the fact that rental companies are in general shifting to SUVs. Chevy reduction is probably related to GMC and Caddy increase (noted in the article). Still there is a desire to offer renters light trucks. General Motors Co. ’s GMC, which mirrors Jeep’s strategy, sold 4,000 more vehicles to rental companies than a year ago, according to Polk. Jeep isn’t alone in clocking big rental gains in 2015. GM’s struggling Cadillac brand boosted sales to rental companies 52%, Edited January 4, 2016 by bzcat Quote Link to comment Share on other sites More sharing options...
Anthony Posted January 4, 2016 Share Posted January 4, 2016 A lot of it is smokes and mirrors. Chrysler reduction is probably related to Jeep and Dodge increase, and the fact that rental companies are in general shifting to SUVs. Chevy reduction is probably related to GMC and Caddy increase (noted in the article). But Chevy has more CUVs / SUVs than Caddy and the same amount as GMC (well, actually one more than GMC if you include the Trax now). Or are you implying rental companies are mainly interested in buying high end utilities? Hence the uptick at GMC / Caddy / Jeep? Quote Link to comment Share on other sites More sharing options...
bzcat Posted January 5, 2016 Share Posted January 5, 2016 (edited) But Chevy has more CUVs / SUVs than Caddy and the same amount as GMC (well, actually one more than GMC if you include the Trax now). Or are you implying rental companies are mainly interested in buying high end utilities? Hence the uptick at GMC / Caddy / Jeep? I'm not implying anything. The article said rental companies like SUVs. The article also said Cadillac increased rental sales by 52% to prop up its struggling sedans and GMC increased by 4,000 units vs 2014. That allowed the Chevy brand to reduce shipment to rental companies. In the case of GM, it's likely that GM just substituted ATS and XTS/CTS for Malibu and Impala/Lacross; and sent more Terrain instead of Captiva (production ended in 2014). In the case of Chrysler, it's surely because they lowered 200 shipment to rental chains but that may be because rental chains asked for more SUVs in their 2015 contracts. Contract with rental companies are generally output deals. The deal specify the volume for each type of vehicles rental car company needs during a period of time, with list of required equipment for each class. It is *generally* up to the car companies to decide the exact make and model and trim level to send to the rental chains. There is also residual value protection in some contracts so it it to the benefit of both car company and rental chains to have a fleet the reflects the model and trim level mix as the retail mix for that brand - i.e. it is good idea for Ford to send 60% Fusion SE and 30% Titanium to Hertz and avoid sending any Fusion S at all; or for GM, it may be wise to send GMC models to Enterprise instead of Chevy if GMC has higher projected residual (this part is just conjecture... but you get the big picture). Edited January 5, 2016 by bzcat 1 Quote Link to comment Share on other sites More sharing options...
630land Posted January 5, 2016 Share Posted January 5, 2016 (edited) Rental companies make $ on upselling. "For a few bucks more, you can rent a Jeep!*" "Oh honey, lets get one!" "We rented a Jeep on vacation!" "Wow cool!" *2WD version of Patriot in Florida, no need for 4x4 to go to Disney World parking lot. And FCA needs to make $$, and most Jeeps are driven to Starbucks or 7-11, so not all need to be 'Extreme Rubicon' versions. I can see day when FCA is renamed "Jeep Inc", and they sell Jeep and Ram, with maybe some 'legacy' Dodge cars. Edited January 5, 2016 by 630land 1 Quote Link to comment Share on other sites More sharing options...
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