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GM to continue weaning itself off fleet sales
Filed under: Car Buying, Chrysler, Ford, GM
Even after posting a $3.25 billion loss, General Motors won't resort to fleet sales to ease their pain. In the automotive industry, fleet sales typically represent the lightly equipped, and heavily discounted, vehicles sold to rental companies or corporations. The numbers are significant, and fleets sales of a particular model may even exceed the volume sold at retail. Often laden with special financing incentives, the sales are less profitable for the automaker, and they hurt the used-vehicle market when a large number of the same model are dumped into the marketplace simultaneously.
Last year, GM sold about 700,000 units to fleet sales. In 2008, that number is projected to drop to about 575,000 units. By 2009, it will decline even further with a sales projection of just over 500,000 fleet units. GM isn't the only automaker following this path. Ford's sales to rental companies are down 16 percent from the same quarter last year. Chrysler LLC also curbed their sales, but they have declined to offer specifics. Automakers are also taking steps to increase used car values. Instead of selling "stripped" vehicles to rental fleets, the cars are equipped more with consumer-friendly options such as sunroofs and upgraded audio packages.
[Source: Automotive News, subs. req'd]
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Even after posting a $3.25 billion loss, General Motors won't resort to fleet sales to ease their pain. In the automotive industry, fleet sales typically represent the lightly equipped, and heavily discounted, vehicles sold to rental companies or corporations. The numbers are significant, and fleets sales of a particular model may even exceed the volume sold at retail. Often laden with special financing incentives, the sales are less profitable for the automaker, and they hurt the used-vehicle market when a large number of the same model are dumped into the marketplace simultaneously. Last year, GM sold about 700,000 units to fleet sales. In 2008, that number is projected to drop to about 575,000 units. By 2009, it will decline even further with a sales projection of just over 500,000 fleet units. GM isn't the only automaker following this path. Ford's sales to rental companies are down 16 percent from the same quarter last year. Chrysler LLC also curbed their sales, but they have declined to offer specifics. Automakers are also taking steps to increase used car values. Instead of selling "stripped" vehicles to rental fleets, the cars are equipped more with consumer-friendly options such as sunroofs and upgraded audio packages.
[Source: Automotive News, subs. req'd]
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