Automakers have struggled for years to reduce their reliance on sales in so-called “toxic” channels such as short-term rentals and self-registrations, which offer easy and quick access to the market but low margins, with varying degrees of success.
But now, the double hit of the pandemic and the semiconductor shortage appears to have done their work for them.
With demand far outstripping supply -- for the moment -- automakers are selling every car they can build, at higher prices, to private and fleet customers, bringing them record profits even at greatly reduced volumes. Those two channels have gained market share, while sales to rental companies and self-registrations are down.
“Self-registrations usually mean higher discounts, so if you need fewer of them, it’s a healthier market,” said Benjamin Kibies, senior automotive analyst at Dataforce, which tracks sales by channel.
At some brands, the decline since 2019 has been dramatic. Renault and Ford have both reduced self-registration and rental sales by more than 70 percent since 2019 (see chart, below).
It’s not clear what will happen when the chip supply returns to a more normal level. Will volume take precedence over value as automakers try to regain lost market share, or will the “toxic” sales channels remain off-limits? If so, the European market could look very different in the future, with lower overall volume becoming the new normal.