Toyota boosts US sales with rental cars

Automaker has avoided rental market in the past

Published On: Feb 14 2012 01:29:10 PM EST   Updated On: Feb 14 2012 01:32:09 PM EST
DETROIT -

Toyota's strong start to 2012 got a boost from rental-car sales, a market it has avoided in the past.

The company sold 24,409 cars and trucks to U.S. fleets in January, a 47 percent increase over January of last year. Without fleets, Toyota's U.S. sales would have been up less than 1 percent for the month, instead of the 7.5 percent increase it reported.

The sharp rise in fleet sales is big change for the Japanese automaker, which has long shied away from the market because it's less profitable than sales to individuals. Rental-car sales, in particular, can hurt a brand's image and lower resale values because they flood the market with models. Ninety-three percent of Toyota's January fleet sales went to rental-car companies. The rest went to corporate customers.

Toyota says it won't be a long-term trend, and that it's making up for contracts it couldn't fulfill because of earthquake-related shortages last year.

The numbers don't show which vehicles went to rental fleets, but two aging models -- the Toyota Yaris subcompact and Toyota Avalon sedan -- posted huge sales increases last month. That's often a sign that cars are being sold to fleets.

Toyota typically sells 7 to 8 percent of its vehicles to rental fleets, but in January that rose to 18 percent.

In a recent interview with The Associated Press, Toyota Motor Corp.'s U.S. sales chief Bob Carter said the company sold few cars to fleets in the second half of 2011 because inventories were so low.

"We said we would make it up to them when we were back up to 100 percent," Carter said.

Carter said fleet sales also will be high this month, but will drop to more normal levels in March. The company expects to sell less than 10 percent of its vehicles to fleets in all of 2012, spokesman Steven Curtis said.

Even with the increase, Toyota relies far less on fleet sales than Detroit automakers. General Motors Co. sold 28 percent of its cars and trucks to fleets in January, while 29 percent of Ford Motor Co.'s sales went to fleets.

Toyota's chief rival, Honda Motor Co., sells few cars to fleets.