Rental Companies Cancel New-Car Orders
Who needs shiny new cars to rent when nobody is traveling?
Surely not rental-car companies in the U.S. They’ve been canceling orders for new vehicles left and right, Bloomberg News reports.
No wonder. Rental fleets say their revenues are down 80% because of state-level stay-home orders to help soften the COVID-19 pandemic. Business isn’t likely to perk up until at least June as those travel restrictions begin to ease.
Take It Back
General Motors is taking back thousands of cars that were sold and already on their way to Avis Budget, Enterprise and Hertz, according to Bloomberg. Some of those cars were retrieved and sent to GM dealers.
Hyundai has taken a similar tack, diverting to its dealers a portion of vehicles it had earmarked to build for fleet buyers.
Last month, Fiat Chrysler Automobiles tried unsuccessfully to redistribute nearly 30,000 cars it had already delivered to rental-car operators to other fleet buyers. Bloomberg says the scheme broke down over the logistics of making the transfer sales.
Normally, fleet sales account for roughly 20% of total figures reported for U.S. new-car sales. But market analyst Cox Automotive says demand for such vehicles nosedived 77% in April to the lowest total—a mere 33,000 vehicles—in at least seven years.
The industry’s fleet sellers are confident that their business will revive…whenever people start to travel again.
Have economies of scale come to the production of automotive parts with carbon fiber materials?
The way people are going to get transportation is changing the world over. Get ready for it.
The common wisdom seems to be that midsize cars have pretty much had it in the U.S. new car market.