General Motors has taken a beating in the headlines this year as falling U.S. sales have cost it nearly a full point of market share. U.S. vice president of sales, Kurt McNeil, says GM's deliberate move to cut low-profit sales to rental car companies and focus on more lucrative retail sales to individual customers is behind the drop. But the auto industry's focus on top-line sales numbers has made GM look bad compared with competitors.
Kurt McNeil claims he has a strategy that can help GM to increase its sales numbers, despite the fact that GM's market share has fallen to 16.8 percent from 17.6 percent a year ago, and sales are down 4.2 percent. He also says that the company is trying to improve the residual (trade-in) value of its products. In fact those rental units are not being a factor in the company's share going forward. Last year the industry ended up selling 17.5 million light vehicles, an all-time record. So, is the company going to beat that? We guess it's going to be close.
Analysts say there will be as many as 3.5 million late-model leased cars coming back this year. You may think that this factor can pull sales from new cars and bring down prices. Rental is still a huge source of late-model vehicles coming back into the flow of commerce. Kurt McNeil says that he likes the company's strategy of pulling daily rental out because all along, with off-lease, it's competing and undermining your new car business.
