GM aims to cut fleet sales even more

[Flybrian]

GM to sell 20,000 fewer cars to fleet customers

Link to Original Article @ The Detroit News

General Motors Corp. said it will sell 20,000 fewer vehicles to rental-car companies this month, driving down its total sales, Bloomberg News reported today.

The company's planned decline in low-profit rental sales will reduce its first-half total by 100,000 vehicles, GM sales analyst Paul Ballew said today on a conference call.

"We're going to try like hell" to sell more cars and trucks this month, sales chief Mark LaNeve said on the call, Bloomberg reported. He declined to say whether GM expects an increase from June 2006, which had one fewer sales day than this month.

The reduced business with so-called fleet customers such as rental companies makes it harder for Detroit-based GM to halt a seven-year U.S. sales slide and end market-share losses to Asian rivals led by Toyota Motor Corp. GM's sales fell 3.2 percent this year through May and its market share dropped to 23.2 percent from 23.7 percent a year earlier.

[Drew Dowdell]

Those are sales I don't mind letting Hyundai and Toyota take.....

[Newbiewar]

Those are sales I don't mind letting Hyundai and Toyota take.....

i dont know why anyone would want to be picking them up... gm already said publicly/globaly it makes for a horrible resale value...

so... anyone picking up the scraps gm's leaving behind as it turning around... is just greedy and unconcerned with the their own clients

[vrazzhledazzle]

Wow that seems like a pretty sharp reduction. I would've eased fleet sales little by little every month for two or three years until they get down to a desirable level.

They better be dumping their 06 (or perhaps 05!) crappy/uncompetitive cars into fleets. For example, dump IONs and old VUEs to fleets but don't sell any, not even one, Aura or 08+ Vue to fleet. Dump uncompetive Pontiacs into fleets (which is pretty much all Pontiacs) along with the rest of the G-body cars.

It makes sense from a turn-around plan perspective, but at the end of the year, it will be kinda sad if GM officially loses its #1 crown because of a lack of fleet sales..although on an upside Chrysler needs these sales MUCH more than GM.

[hyperv6]

I have watced in the last few years Goodyear Tire go through the same thing with OE tire sales.

The OE tire market is a low or now profit market that only delivers volume. Goodyear used to be on many American cars with OE spec tires that go their name out there but were never as good as many of their other non oe tire offerings.

It may be a matter of pride to have your name out there but it does not make money the way GM or Goodyear has done it.

If GM follows the same root I would expect to see some GM placment in some fleet sales but only the ones that are high profile and are worth the effort. Goodyear has taken this route and still supply tires for some high profile cars and trucks like the Corvette and the Kappas.

Another good example of GM's problem here is the Lucerne I rented last week. It was a nice car but a base model. I know the loaded car is a different animal but how many in the general public understand that? while the Buick was a good car it did not make me want to run to the dealer to buy one. A CSX model may make one think differently but that is not what you get in these rentals and the general buying public are too stupied to understand that. When many import buyers drive an american car it is most imes a rental and almost never anything more than a base car.

Also company fleets are cars that just get beat to death and most people drive them as a benifit and never as a car of their dreams. Just note how many cops daily drivers are Impala's or Crown Vic's. I have a local Chief here in a Benz.

You always hate to lose a sale but if it cost you money to go to work everyday would you still go? So GM is wise to cut low or no profit sales and do it as soon as possible. The world could use a few less base model stripper Grand Prix's and Lucernes.

While the Goodyear move is a similar move it really has made a differance in the bottom line to the better and I think we will see the same with GM. In todays world it is not how big you are or how much you sell but it is how profitable you are. The press always leaves this out in thier reports on Toyota catching GM. It is not so much GM getting out sold but Toyota's profit per month that is key.

I want to see GM #1 in profits not Sales.

Edited June 24, 2007 by hyperv6

[Newbiewar]

well one thing gm is doing... is forcing fleet sales to appear as retail... i remember them doing this prior to my leaving at the dealership...

but also at the same time... the retail incentives were greater then the fleet deals... so... why bother with the fleet if you could receive a better deal buying it the right way... but GM will only allow a person to get 5 cars a year with regualar retail rebates... i am to believe at least...

[gm4life]

Wow that seems like a pretty sharp reduction. I would've eased fleet sales little by little every month for two or three years until they get down to a desirable level.

They better be dumping their 06 (or perhaps 05!) crappy/uncompetitive cars into fleets. For example, dump IONs and old VUEs to fleets but don't sell any, not even one, Aura or 08+ Vue to fleet. Dump uncompetive Pontiacs into fleets (which is pretty much all Pontiacs) along with the rest of the G-body cars.

It makes sense from a turn-around plan perspective, but at the end of the year, it will be kinda sad if GM officially loses its #1 crown because of a lack of fleet sales..although on an upside Chrysler needs these sales MUCH more than GM.

Watch what you say about Pontiac's and the G-body cars. I have two Pontiacs, and one of them happens to be a G-Pontiac. What do you drive buddy? The G-Platform aside of being a little old is still amazingly effective at what does best a comfortable touring/interstate car. I understand its old but I would not consider a G6, G5, Torrent or Solstice even Grand Prix umcompetive junk. (Have you taken alook at Lucerne or DTS sales, they have been pretty impressive.) Go back too Bulgaria, and drive your 4-banger Toyota. Seriously I prolly have nicer cars than you. Just watch what you say you are on a GM forum and are now bashing some of GM's best cars.

Edited June 24, 2007 by gm4life

[bcs296]

LOL, chill. The g-body had its day for sure but it's old and uncompetitive now, no matter how you spin it. They aren't BAD cars, just not competitive.

[Flybrian]

LOL, chill. The g-body had its day for sure but it's old and uncompetitive now, no matter how you spin it. They aren't BAD cars, just not competitive.

I'd say the G-bodies are still competitive and leading in many regards, its just the class (affordable fullsize sedans) has been eviscerated. What else occupies the direct territory of the Lucerne, the Avalon? Grand Marquis? Amanti?

[gm4life]

Fly pwns again. Fly I am sorry but I had to stick up for my baby.

[The O.C.]

Here's some fleet percentages for auto segments.....FYI. I rec'd this report from a source that I know is legit. However, I'm not entirely sure of the timeframe. I THINK it's CYTD through the end of May.....which would be five months of 2007. For what it's worth.......take a peak:

I've listed the top-ten fleet cars in each segment. If anyone is curious about any other cars or volumes, I can pull that up and tell you......

Subcompacts

Mazda5 43.8%

Cobalt 39.7%

Ion 29.4%

Kia Rio 27.3%

Vibe 27.2%

G5 26.9%

Focus 26.5%

Kia Spectra 25.7%

Lancer 21.8%

Elantra 21.5%

Compacts

Avenger 79.4%

Sebring 63.5%

Malibu 58.8%

Optima 52.8%

Caliber 45.1%

Mazda6 42.7%

G6 36.2%

Sonata 27.6%

Fusion 26.8%

Aura 23.7%

Intermediates

Taurus 96.5%

Grand Prix 77.6%

Magnum 60.9%

Charger 56.2%

Impala 53.9%

Monte Carlo 46.5%

300 44.0%

Five Hundred 43.1%

Kia Amanti 42.5%

Mitsu Galant 35.4%

Full-Size

Crown Victoria 91.3%

Grand Marquis 50.0%

Entry-Luxury

Volvo S40/V50 49.8%

C-Class 15.0%

X-Type 13.2%

Saab 9-3 10.7%

G35 9.5%

Volvo S60/V70 9.2%

CTS 9.0%

Audi A4 6.7%

MKZ/Zephyr 5.3%

Audi A3 5.3%

Presige-Luxury

Town Car 58.5%

DTS/Deville 27.4%

Audi A6/Allroad 20.4%

Infiniti M35/45 15.9%

Volvo S80 15.3%

STS 7.7%

Audi S6 4.1% (counted separate from A6....memo)

Acura RL 2.7%

Lexus GS 2.6%

E-Class 2.4%

There's "Ultra-Luxury" too.....but I didn't list as all the percentages are well under 10% for each.

Edited June 27, 2007 by The O.C.

[frogger]

With cars barely anyone finds appealing vs competitors (Grand Prix, current Malibu) going away soon, that should enable GM to cut fleet sales with their more desirable to the retail market replacements.

[Windy-57]

i dont know why anyone would want to be picking them up... gm already said publicly/globaly it makes for a horrible resale value...

so... anyone picking up the scraps gm's leaving behind as it turning around... is just greedy and unconcerned with the their own clients

This assumes that there's a 1 for 1 trade off. Remember, GM and the rest of the Big 3 used to shove new models down the throats of rental fleets to help keep inventories from going crazy and to inflate sales numbers. They would do so with rediculous bargains; at the time they didn't care because they owned the rental companies and were making money on that end and the units counted toward sales totals. Then they realized that doing that killed resale value and have been backing off ever since. So, I would assume that as GM reduces their fleet units, there will simply be fewer fleet transactions...or another way, there will be a chunk of those sales that nobody picks up.