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Discussion Starter · #1 · (Edited)
Larry posted this on Auto News: FCA spiffs dealers to spin Ram through loaner fleets

“FCA US, battling a decline in demand for Ram pickups, is offering added incentives to U.S. dealers who add new trucks to their service loaner fleets and count them as sales.”

I am all for CDJR dealers offering loaners. But am I the only one who finds this a bit odd, given SM’s ongoing crusade against against “fleet” sales?

Apparently fleet is okay as long as they involve vehicle sales FCA wants to grow o_O
 

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Hardly. These offers aren't "fleet" sales in that sense. The "fleet" that SM wants out of, and has been good at taking FCA out of, is the sales to daily-rental companies: those guys use their volume leverage to drive down purchase price, and profit, and the cars tend to be low-spec as a result of this. That's two big negatives. And add in that if you liked your loan car, you can't talk to Hertz about buying one when you hand in the keys...
 

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Larry posted this on Auto News: FCA spiffs dealers to spin Ram through loaner fleets

“FCA US, battling a decline in demand for Ram pickups, is offering added incentives to U.S. dealers who add new trucks to their service loaner fleets and count them as sales.”

I am all for CDJR dealers offering loaners. But am I the only one who finds this a bit odd, given SM’s ongoing crusade against against “fleet” sales?

Apparently fleet is okay as long as they involve vehicle sales FCA wants to grow o_O
I actually disagree @aldo90731. I actually think this is a really REALLY good idea, just not for the reasons that are outlined. The best way to sell a vehicle is to get someone behind the wheel, and the RAM trucks are really good. Incentivizing dealers to put trucks into the loaner fleet so that people with older vehicles in for service get behind the wheel is a good strategy. If you're FCA, you have a vested interest in getting upgrades in front of the consumer. This is a pretty low-risk and inexpensive way to do that.
 

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My seventy-year-old wife was given a 4WD Ram for a loaner when having warranty work on her Sebring convertible. The rental agency said they didn't have a Chrysler car or van, and before Chrysler would pay for the loaner it had to be a Chrysler vehicle. Several back surgeries make it difficult for her to climb in and she had to crawl in on the floor and pull herself up between the seat and the wheel. Needless to say, when I brought it back to the dealer with fire in my eyes, they miraculously found an Avenger loaner right outside the door.
 

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Larry posted this on Auto News: FCA spiffs dealers to spin Ram through loaner fleets

“FCA US, battling a decline in demand for Ram pickups, is offering added incentives to U.S. dealers who add new trucks to their service loaner fleets and count them as sales.”

I am all for CDJR dealers offering loaners. But am I the only one who finds this a bit odd, given SM’s ongoing crusade against against “fleet” sales?

Apparently fleet is okay as long as they involve vehicle sales FCA wants to grow o_O
Guys... we get "loaner/demo" programs every single month. Every month. Every month.

These do indeed count as "sold" units. There are dealerships that "loaner" 15-30 vehicles every month to hit their targets.
 

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Discussion Starter · #6 ·
Guys... we get "loaner/demo" programs every single month. Every month. Every month.

These do indeed count as "sold" units. There are dealerships that "loaner" 15-30 vehicles every month to hit their targets.
What are you saying? There are dealers in the business of loaning cars...? :p
 

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Discussion Starter · #7 · (Edited)
I actually disagree @aldo90731. I actually think this is a really REALLY good idea, just not for the reasons that are outlined. The best way to sell a vehicle is to get someone behind the wheel, and the RAM trucks are really good. Incentivizing dealers to put trucks into the loaner fleet so that people with older vehicles in for service get behind the wheel is a good strategy. If you're FCA, you have a vested interest in getting upgrades in front of the consumer. This is a pretty low-risk and inexpensive way to do that.
Oh, I am fine with that.

But my argument really is: so which one is it? Are fleet sales to be avoided, or are fleet sales to be encouraged.

IMO, the answer, as I have been saying all along, is both and neither, it depends.

“Fleet sales” are not a bad thing onto themselves. What matters really is (a) what is motivating the automaker to use fleet, (b) what is being sold to fleets, and (c) does those fleet sales serve any purpose beyond inflating monthly numbers?

I’d argue fleeting Chrysler 300 with cheap interiors serves no real purpose because it won’t convince anyone to buy one.

So when we read another report of declining sales with the now-overused footnote that the decline is due to lower fleet sales, we ought to be asking would those fleet sales that were eliminated has been worthwhile ?
 

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I actually disagree @aldo90731. I actually think this is a really REALLY good idea, just not for the reasons that are outlined. The best way to sell a vehicle is to get someone behind the wheel, and the RAM trucks are really good. Incentivizing dealers to put trucks into the loaner fleet so that people with older vehicles in for service get behind the wheel is a good strategy. If you're FCA, you have a vested interest in getting upgrades in front of the consumer. This is a pretty low-risk and inexpensive way to do that.
That's not at all how dealerships leverage this program at all though.

Typical strategy -
You're 15 new retail sales away from hitting VPA (vehicle performance allowance), aka, your FCA mandated target.
You hit that target, and each sale for the month gets a retroactive bonus, we'll use $300 as an example.
35 Cars sold = no bonus
50 Cars sold = $300 retroactive or $15,000 in total bonus
FCA's Loaner Program allows you to sell a vehicle to yourself for X amount below invoice, the caveat being that you must put X amount of kms and/or 3-6 months before a sale.
Managers drive the vehicles up to the allotted kilometer mandate.
Sell on the lot once kms/time has been hit, often with profitability due to the loaner program.
 

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That's not at all how dealerships leverage this program at all though.

Typical strategy -
You're 15 new retail sales away from hitting VPA (vehicle performance allowance), aka, your FCA mandated target.
You hit that target, and each sale for the month gets a retroactive bonus, we'll use $300 as an example.
35 Cars sold = no bonus
50 Cars sold = $300 retroactive or $15,000 in total bonus
FCA's Loaner Program allows you to sell a vehicle to yourself for X amount below invoice, the caveat being that you must put X amount of kms and/or 3-6 months before a sale.
Managers drive the vehicles up to the allotted kilometer mandate.
Sell on the lot once kms/time has been hit, often with profitability due to the loaner program.
Similar to vehicles that go into the demo service but never actually get demoed.
 

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Oh, I am fine with that.

But my argument really is: so which one is it? Are fleet sales to be avoided, or are fleet sales to be encouraged.

IMO, the answer, as I have been saying all along, is both and neither, it depends.

“Fleet sales” are not a bad thing onto themselves. What matters really is (a) what is motivating the automaker to use fleet, (b) what is being sold to fleets, and (c) does those fleet sales serve any purpose beyond inflating monthly numbers?

I’d argue fleeting Chrysler 300 with cheap interiors serves no real purpose because it won’t convince anyone to buy one.

So when we read another report of declining sales with the now-overused footnote that the decline is due to lower fleet sales, we ought to be asking would those fleet sales that were eliminated has been worthwhile ?
This program does not report as a Fleet Sale Aldo. These are retail counters. All domestic brands do this from my understanding.
 

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That's not at all how dealerships leverage this program at all though.

Typical strategy -
You're 15 new retail sales away from hitting VPA (vehicle performance allowance), aka, your FCA mandated target.
You hit that target, and each sale for the month gets a retroactive bonus, we'll use $300 as an example.
35 Cars sold = no bonus
50 Cars sold = $300 retroactive or $15,000 in total bonus
FCA's Loaner Program allows you to sell a vehicle to yourself for X amount below invoice, the caveat being that you must put X amount of kms and/or 3-6 months before a sale.
Managers drive the vehicles up to the allotted kilometer mandate.
Sell on the lot once kms/time has been hit, often with profitability due to the loaner program.
I know....it’s how I got my Grand Cherokee Overland!
 
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Discussion Starter · #13 ·
This program does not report as a Fleet Sale Aldo. These are retail counters. All domestic brands do this from my understanding.
That may very well be their categorization for reporting purposes.

But does anyone really believe these to be “retail” sales?
 

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My dealer having a Caliber as a loaner is what made me aware of them. My dealer is about an hour away so I had a decent amount of time to drive one. As soon as I was able to, I bought mine. If it weren't for the program, I doubt I would have thought to look at them. I've also driven the 200, Patriot and and Ram 1500 as loaners as well. I can really see the positives of having them as loaners.
 

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That may very well be their categorization for reporting purposes.

But does anyone really believe these to be “retail” sales?
Nobody but you believes them to be fleet sales. Call it out for what it actually is: hidden discounting, but it's definitely not fleet.
 

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Discussion Starter · #16 ·
I owned a 1998 Sebring JXi: I absolutely loved that car.

In 2008 my dealer loaned me a Chrysler Sebring convertible. I couldn’t believe that 10 years later Sebring had been reduced to such a cheap, ugly heap. I almost vomited...!
 
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Nobody but you believes them to be fleet sales. Call it out for what it actually is: hidden discounting, but it's definitely not fleet.
They may be "sold" units, but they shouldn't be lumped into retail sales for any brand because a customer isn't actually buying them when they are marked as sold.

If dealerships have to do this regularly to meet their sales goals, that may be a sign that the sales goals are too high.
 

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Discussion Starter · #18 ·
Nobody but you believes them to be fleet sales. Call it out for what it actually is: hidden discounting, but it's definitely not fleet.
No need to get personal.

Sure, call them what you want. Still they are not retail either. And the intent with which FCA is using this program, i.e., to unload unsold Ram trucks within the context of declining sales, has a whiff of fleet sales to it.

If dealerships have to do this regularly to meet their sales goals, that may be a sign that the sales goals are too high.
That’s the key to the puzzle right there: the moment you start using a program for other than its originally intended purpose.
 
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Apologies for the tone - it wasn't my intention to be rude.

This method of discounting is rife in Europe, where cars go into demo and loan fleets and are later sold on as "slightly used". They're genuine retail sales, just discounted and delayed. It's not the same as the day-rental fleet sales, as it does at least give dealership customers a bigger chance of driving the product.

In moderation, it's an advertising program. In excess (hello, Hyundai!) it's way to game the sales figures without it being obvious that you're dumping stock.
 

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Apologies for the tone - it wasn't my intention to be rude.

This method of discounting is rife in Europe, where cars go into demo and loan fleets and are later sold on as "slightly used". They're genuine retail sales, just discounted and delayed. It's not the same as the day-rental fleet sales, as it does at least give dealership customers a bigger chance of driving the product.

In moderation, it's an advertising program. In excess (hello, Hyundai!) it's way to game the sales figures without it being obvious that you're dumping stock.
***replies to this post and the discussion of the luxury market can be found here.

This thread is exclusively about Ram's new loaner program.
 
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