GM still devoted to cut on rentals despite losing market share image

Even if General Motors reported sales and market share drops in recent months, CEO Mary Barra reiterated that the company would continue to focus on a healthier business environment.

Among the major automakers, General Motors posted the biggest sales decline of 18 percent in May in the United States because of its planned cutting strategy on rental fleets to focus on more lucrative retail sales. GM said the rentals were down nearly 22,000 units, or 49 percent, while year-to-date figures plunged with more than 82,000 vehicles from a year ago. This strategy has had a serious impact the on company’s market share, as it dropped from 17.7 to 16.6 percent through May, the lowest point ever.

Nevertheless, GM is determined to keep pushing further onto this path. “We have the most significant increase in retail market share growth and we aren’t changing from that strategy,” Barra recently reiterated. “Not only does it strengthen residual values but it also will position us well if and when the cycle turns.”

As it aims to continue relying on high-margin models to boost profitability, GM is also planning to increase the US production of trucks, by shifting back some of the output in Mexico. The US’s biggest automaker will reportedly start making some of the full-size Chevrolet Silverado and GMC Sierra pickups in its assembly plant in Flint, Michigan. For now, it is still on track to increase its global annual earnings, to return to profit in Europe, while it has also managed to get back on a growth trend in China.