Did GM Maintain the Right Balance between Retail and Fleet Sales in August?


Nov. 20 2020, Updated 4:36 p.m. ET

General Motors

General Motors (GM) is the third-largest automaker in the world by sales volume. Globally, Toyota (TM) and Volkswagen (VLKAY) are ahead of GM in terms of sales.

GM wound up in bankruptcy court in June 2009, but the company made a good comeback by shutting down its loss-making or less profitable vehicles, which included brands like Hummer, Saturn, and Pontiac. Now let’s take a look at GM’s August month’s sales figures and see how the company continues to focus on expanding its retail sales.

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GM’s retail sales fell in August

In August 2016, General Motors sold more than 256,000 total vehicles in the United States, which was about 5% lower than its sales in August 2015. It’s worth noting that in August 2016, the company’s retail vehicle sales also fell by 5.4% from August 2015, reaching ~213,000 vehicle units.

In the full-size pickup truck segment, higher retail sales of GM’s Chevrolet Silverado and GMC Sierra helped it stay on top.

But notably, earlier this year, GM guided that it would maintain its fleet sales below 20% of its total vehicle sales. In August, its fleet sales were just 17% of its total vehicle sales, and the company reported a YoY (year-over-year) decline of 34% in its rental car sales.

Unlike Ford (F), GM has been cutting its fleet sales to rental car companies for the last several quarters in order to protect its margins and to utilize plant capacity to manufacture more profitable vehicles for retail customers.

Autonomous vehicles and fleet sales

Meanwhile, in May 2016, GM completed the acquisition of Cruise Automation to accelerate its autonomous vehicle development.

As noted earlier in this series, for an automaker (IYK), retail sales typically yield higher margins compared to daily rentals or fleet sales. Fleet sales are vehicles sold to private and public organizations, including rental car companies. Due to the bulk quantity of these sales, auto companies sell these vehicles with lower margins than retail vehicle sales.

Continue to the next part to the next part for a look at Fiat Chrysler Automobiles’ (FCAU) August sales.


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