Nissan Rental Sales: The Altima Might Remain the Fastest Car on the Road
If you’ve rented a car in recent years, there’s a great chance you were offered a Nissan of some sort. Whether it’s the Altima or Rogue, Nissan has long relied heavily on fleet sales, and the company’s most recent sales numbers show that the habit hasn’t died yet. A whopping 44 percent of its February 2024 sales, or around 40,000 vehicles, went to fleets, so get ready to be a temporary Nissan driver the next time you rent a car.
While surprising, the 44 percent number isn’t entirely out of line with Nissan’s sales through 2023, where around a quarter of its sales came from fleets during the first 11 months. That’s terrible news for its dealers, half of which are unprofitable, according to a source talking to Automotive News.
Though those numbers don’t look great for Nissan, its leader of U.S. sales, Judy Wheeler, said that the sales were due to a glut of Rogue crossovers and blamed consumers’ quicker-than-expected shift toward hybrids. The fleet sales help take some pressure off dealers to move a ton of excess inventory. The 2024 Rogue and Sentra were also delayed, so some of February’s sales should have taken place last year.
The company said it expects rental fleet sales to stabilize and noted that it would come within a point or two of its 15 percent target. Even so, it has already faced difficulties with fleet sales, as before the pandemic, it said the practice had damaged vehicle residual values and driven its dealers toward unprofitability.
Wherever the fleet sales number lands for 2024, it’s clear Nissan has work to do. A dealer told Automotive News that the brand is moving a fraction of the number of vehicles that rivals Toyota and Honda do, and it has the most days of inventory of any full-line automaker in January.
[Image: Nissan]
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Chris grew up in, under, and around cars, but took the long way around to becoming an automotive writer. After a career in technology consulting and a trip through business school, Chris began writing about the automotive industry as a way to reconnect with his passion and get behind the wheel of a new car every week. He focuses on taking complex industry stories and making them digestible by any reader. Just don’t expect him to stay away from high-mileage Porsches.
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"The company said it expects rental fleet sales to stabilize and noted that it would come within a point or two of its 15 percent target. Even so, it has already faced difficulties with fleet sales, as before the pandemic, it said the practice had damaged vehicle residual values and driven its dealers toward unprofitability."
Before this 44 percent number, Nissan was running about 25 percent fleet sales, way above their 15 percent target level. Cars are sold to rental fleets at a discount (less revenue for Nissan). Also, rental companies sell cars after 6-8 months, or before 30,000 miles, resulting in a huge dump of used cars on the market, which depresses residual values for other Nissans - a double whammy.
Nissan reported making only $800 profit per new vehicle sold in 2023, the lowest of all the major automakers. As Peter De Lorenzo would say, a mile-long freight train of Not Good.
Big mistake. Daily rental fleet sales are the fastest path to brand devaluation and lower resale and residual values. Without any incentives, you can lease a superior Accord or Camry for less than an Altima simply because the residual value of the Nissan is so much lower than the Toyota or Honda. When these fleet cars come out of service and hit the auctions in big numbers, Altima values will drop even faster as there will be a huge glut on the market. This same thing happened after the 2008-2010 recession, automakers dumped excess production capacity into fleets and a year later you could buy a Chevy Malibu or Ford Taurus for 50% off MSRP with less than 20k miles. Nissan really needs to invest in improving their product to sell at retail and adjusting production to meet actual demand. Otherwise they'll be the next Mitsubishi.