Passenger car fleets are finally making an investment in new cars, including a large number of foreign vehicles. While Ford, General Motors and Chrysler all reported stronger overall sales in recent months, it appears Hyundai-Kia is not making a strong impression on ordinary consumers. To boost revenue and make up for lost profits, the automaker has begun to focus on fleet sales.
Consumer sales low, fleet demand still strong
During the first quarter of 2013, Hyundai-Kia retail sales plummeted 9 percent year-over-year - a significant drop, considering many major competitors increased their numbers. Part of this could be a result of the limited production capacity the company is dealing with. With no immediate expansion plans in the works and facilities currently operating at full capacity, Hyundai-Kia may be unable to make enough vehicles with details appealing to ordinary consumers. A shortage of models desirable to consumers could also be forcing them to hold off on purchases.
Despite lower retail sales, Hyundai-Kia fleet transactions were up. According to Automotive News, fleet sales accounted for 15 percent of the automaker's total sales, compared to only 9 percent during the same period of 2012. This marked a total of 42,400 fleet units being sold during the first three months of the year. Because of the increase in this side of the business, the company has recognized the demand for new fleet automobiles and stepped up its fleet volume 50 percent.
Automotive fleets are sometimes drawn to these foreign-made cars because of their updated designs and technological features, which often include significant fuel economy benefits. For light and medium-duty fleets, as well as heavy-duty fleets, the use of technology such as vehicle routing software and routing and scheduling software can provide additional fuel savings opportunities through more efficient vehicle utilization and a reduction in wasted miles during normal distribution activities.