As General Motors keeps focusing on cutting on rental sales, its monthly figures will drop even further in May.
One of the biggest sales drivers for carmakers is the fleet business with rental companies, which considerable pushes up the figures. Even if this type of deal is not at all a lucrative one in terms of margins, as there are some huge discounts offered for large orders, the auto companies are relying on them to keep the production at full speed, to increase their market share and to post as high as possible monthly sales numbers. General Motors has started for some time now to cut on fleets as a healthy approach to increase earnings by focusing on retail sales. And this is the reason behind GM’s oscillating sales reports over the recent months. The biggest automaker in US is likely to drop at least 10 percent in May, according to Bloomberg, because it will reduce deliveries to rental fleets this month by 20,000 units – which means 7 percent less compared with May 2015 – and also because this month has two fewer selling days.
GM sold about 449,000 vehicles to US rental car companies in 2014, it reached 400,000 vehicles in 2015 and this year expects to sell about 310,000 to 320,000 vehicles to the daily rental market, GM North America President Alan Batey said to Reuters in March interview. “We’re going to stay very disciplined,” he recently reiterated. “We’ve seen this movie before and in fact probably played a leading role.” In April, GM was the only US automaker who went below par, posting a 4 percent drop in sales.