Chrysler Resurgence Mostly Built on Rental Fleet Sales

Amid all the hoopla surrounding the Chrysler introductions at the 2011 Detroit Auto Show is the little known fact that its resurgence until now is largely due to increased sales to rental car fleets – and that’s a problem for the brand a few years from now.

According to Automotive Leasing Guide, the Chrysler brand, which has had a history of high rental fleet levels in the past several years, showed the highest increase in rental fleet penetration (RFP) to 49 percent in 2010 compared to 19 percent in 2009. Patrick Rall reported here on TorqueNews.com that Chrysler Group (including Chrysler, Dodge, Jeep and Ram) sales were 1,085,211 units sold throughout the past year. This 17 percent improvement over 2009 came without any real additions or modifications to the product lineup across their four brands.

But Automotive Leasing Guide looks at the numbers behind the increase. It reports, “Though industry retail sales showed improvement in 2010, the Chrysler, Dodge and Jeep brands all suffered declines in retail sales compared to 2009. While the decline in sales has a positive impact on residual values due to the drop in used supply, the increase in rental fleet penetration will negate much of the used supply impact on residual values due to the decline in perceived quality and residual performance relative to the competitors.” In other words, it’s bad news when the bulk of your sales are to rental car fleets.

The Chrysler 200 has replaced the Chrysler Sebring, a staple of the rental car fleets but after spending some time with it in Napa Valley in November – and knowing the competition it faces – the Chrysler 200 could see a lot of duty at the National rental car lots.