GM Expects Uptick in Fleet Sales, Despite Rental Pullback
The auto maker will shift sales away from rental-car firms and toward commercial and government customers, likely pushing up deliveries in the segment by as much as 25% from 2011 levels.
DETROIT – General Motors expects to trim the number of vehicles it sells to rental-car companies but wants overall deliveries from its Fleet and Commercial Operations to jump year-over-year, a high-ranking executive tells WardsAuto.
Ed Peper, general manager-GMFCO, says the auto maker will shift sales away from rental-car firms and toward commercial and government customers, likely pushing up deliveries in the segment by as much as 25% from 2011 levels.
“We are not letting up,” Peper says of the division’s plans. “We think we’ve got a nice balance. Total fleet (sales) will be up” in 2012.
Chris Perry, global marketing chief for Chevrolet, told WardsAuto after unveiling the redesigned-for-’14 Chevy Impala that GM’s sales to rental-fleet operators would decline. The Impala is one of GMFCO’s top-selling vehicles, but the new model arriving next year features a design and content level targeting retail buyers.
Peper stops short of indicating how far GM will pull back daily rental sales, saying only that it will be “significantly less.” He says it has not been determined how the new Impala will be marketed to rental companies, but on the commercial and government side GM will pursue as many Impala sales as possible.
GM is approaching the rental space much differently today than prior to its bankruptcy. In the past, Peper admits, it was an outlet for GM’s over-production. But with the restructured auto maker now able to build to market demand, rental sales can be profitable.
“People have seen the (production) discipline,” says Peper, on the job 90 days at GMFCO after a stint leading Cadillac sales. “We are doing what we said we were going to do.”
At the same time, Peper tells journalists in a conference call, GM will not turn its back on the rental segment, where its vehicles get “15 million test drives every year.”
But the cars it sells within the segment no longer will be “airport strippers” devoid of content; they will be well-equipped models highlighting GM’s revamped portfolio.
“It is a big switch,” Peper says.
GM sees big opportunities in the commercial and government spaces, where vehicles in operation now average more than 11 years old. So far this year, the auto maker’s pickup-truck and van sales to tcommercial customers are up 37%, Peper reports, and GMFCO has booked 24 consecutive months of year-over-year sales gains.
GMFCO offers 40 different models, including an all-new Chevy Caprice law enforcement vehicle, a compressed-natural-gas fullsize van and bi-fuel fullsize pickups.
“Fleet and commercial is great business for us and good business for our competitors, and we will not cede one bit of it,” Peper says.
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