Chrysler aims to trim rentals

Already bracing for a slowing U.S. market, Chrysler LLC wants to reduce sales of vehicles to government and commercial buyers, such as rental-car companies, by perhaps as many as 200,000 autos this year.

The newly private automaker is undergoing dramatic changes — from slashing as many as 25,000 jobs to cutting nameplates — and the change in its sales strategy is part of Chrysler's efforts to make it a retail-based company that relies on what Chrysler President Jim Press calls a "pull-driven system."

Recently Press and Chief Executive Officer Bob Nardelli indicated the company wants to cut its fleet sales toward 20% of its total sales.

"We're looking for a very small increase in retail but we're going to be reducing our dependency on fleet substantially," Press said of 2008 goals. "That's part of a plan that we have to become a more of a retail-oriented company, improve our residual values and improve our focus in terms of production, to meet retail demand versus fleet demands."

J.D. Power and Associates estimates that Chrysler's fleet sales last year were about 30%. The market-research company estimates the industry fleet average is about 21%.

One industry official familiar with Chrysler's sales results corroborated that the automaker's U.S. sales are 30% for fleet purchases and that a reduction to 20% would mean the loss of about 200,000 sales — about the same as the number of vehicles made at a typical factory in a full year. Chrysler sold about 2.1 million cars and trucks in the United States last year — a 3% decline from 2006. More at Detroit Free Press