Final March sales numbers are in and Nissan is elated to report that they have narrowly edged out both Toyota and Honda for the number one midsize car sales spot. Narrowly might be a slight understatement, 115 units was all that separated the Altima’s total 37,763 sales from the Camry’s 37,648.
Honda managed to secure the number three spot selling 36,449 units of their recently redesigned Accord, just a mere 1,314 shy of the number one Altima. Another contender in the midsize car sales fight comes from Ford with their also recently redesigned Fusion. Fusion sales totaled 30,284 in March which is a bit further down the ladder from the top three in the midsize car pack, but it’s important to note that this was the best sales month ever for the Fusion.
Looking at sales on a year-over-year basis shows that the Altima, Camry, and Malibu are all down substantially, whereas the Accord and Fusion have made some pretty impressive gains. As we have pointed out in the past, the midsize car segment is hotter than ever with the degree of separation between each model shrinking more and more with each passing month.
Although the Altima takes the cake for March, total year-to-date sales still favor of the Camry by over 12k units. Both the Accord and Altima are in tight contention for the number two spot and if Nissan manages to maintain their recent sales momentum there’s no reason doubt they should be able to secure second place.
So what gave the Altima the edge to beat out the Camry in March? The answer is twofold, the first element being an upward tick in incentive spending over the first quarter of this year which has stirred consumer activity, but the primary culprit behind the sales increase is most likely Nissans heavy reliance on rental fleet sales.
Looking at incentive spending over the past year shows that many of the vehicles in this segment have trended downward, but over the course of the first quarter this year nearly every single manufacturer in this segment has increased spending. If one company caves and ramps up incentives all will follow to stay competitive, this is most likely what we’re seeing here.
Last month Chevrolet offered the highest levels of incentives averaging over $3,100 on each Malibu sold. Nissan came in second offering nearly $2,400 on every new Altima sold followed closely by the Toyota Camry at just over $2,300. During the second half of last year Nissan had been doing pretty good job maintaining low incentive levels. At one point they even held a four-month straight streak of bottom of the segment incentive spending.
It’s also important to point out that over the past year Nissan has averaged the lowest average incentive spending of the group around $2,218 per unit. Over the course of the past 13 months, Toyota incentive spending has fluctuated the least averaging $2,228 per Camry, this slots them in at the number two spot. The other vehicles in this set have a collective average of $2,640, a few hundred dollars higher than the Altima and Camry.
Looking at the latest Polk registration data shows that rental fleet penetration of the Altima consistently ranks towards the top of its set competitive set. Last year 20% of all new Altima sales went straight into rental fleet duty, which was right behind the Malibu at 25%. In comparison, only 13% of Fusions made it into rental duty and 12% of Camrys. Historically Honda has never been very fleet heavy and the same was true for last year as only 1% of Accord sales were to rental companies.
It’s no secret that heavy fleet penetration usually has corrosive effects on overall vehicle values, and manufacturers must judiciously allocate supply to rental fleets as a result. Let’s face it nobody wants to drive a car that’s stigmatized as a rental car.
So on the surface while Nissan can claim overall sales victory for March, it won’t come without a cost.