By on October 2, 2008

Well, obviously. But it should be remembered– as CNNMoney does– that the new Chevrolet Malibu was supposed to mark the dawn of a new era. The General promised that it would end its reliance on residual-killing stack ‘em high and sell ‘em cheap fleet sales. So much for that then. “When launching the car last fall, GM said its goal for the Malibu was to sell no more than 20% to rental car companies, down from 40% for the old models. But the auto maker said Wednesday that of 19,725 Malibus sold last month, 10, 462, or 53%, were sold to fleets. Fleet sales include those to rental car companies, along with government and corporate fleets.” Other candidates: Pontiac G5 (+27 percent), Vibe (+91 percent), HHR (14.4 percent) and Vue (+9.7). And so on. In fact, except for (but maybe not) the Lambda-based crossovers, there isn’t a single GM model that gained ground in September that doesn’t seem like a fleet queen. “During the month, sales of vehicles to fleet customers jumped 17% compared to September 2007, while retail sales dropped 26%.”

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17 Comments on “TTAC Called It: GM Sept. Results Propped-up by Fleet Sales...”


  • avatar
    Captain Tungsten

    Nicely biased article. Headline reads “GM Relied More On Fleet Sales In September”. More than who? More than what? No mention of what the other companies did in fleet this month, and that makes it hard to judge what happened. Maybe some regularly scheduled fleet orders shipped in Sept. Maybe not. But CNN says “When launching the car last fall, GM said its goal for the Malibu was to sell no more than 20% to rental car companies, down from 40% for the old models. But the auto maker said Wednesday that of 19,725 Malibus sold last month, 10, 462, or 53%, were sold to fleets.” Nothing said about how many actually went to rental car.

    This is much ado about nothing without more information about industry fleet sales during the month.

  • avatar

    Captain Tungsten :

    I beg to differ. It’s clear from the article and the numbers that GM’s using fleet sales MORE THAN BEFORE. In other words, releative to itself. Relative to its own promises.

    Month after month, GM blamed dropping sales on their “responsible” decision to cut fleet sales. Supposedly they were doing so to protect residuals and reduce incentives.

    Well, when the chips are down, GM’s promises go out the window. Without acknowledgment, of course. In fact, the company’s press release on September stats highlighted the Malibu surge.

    It’s certainly true that Chrysler’s fleet sales are FAR higher a percentage of their sales than they are at GM. In fact, without fleets, Chrysler would already be dead.

    But that doesn’t invalidate the main thrust of this story. GM can’t shut the product pipeline off fast enough; they’re “dumping” the result into fleets. This does not augur well for GM’s immediate prospects– especially considering the Malibu’s rep as “the car we don’t need to discount.”

  • avatar
    RayH

    I was reading a thread about GM falling 16% on GMInsideNews for shoots and giggles last night. Not one person mentioned the “great” showing might be a result of fleet sales, although around post 70, someone guessed they’d do that next month.

    53% of Malibus to fleet?! I guess it’s no surprise since the first couple of the new design I saw were rentals, but damn.

    “Car in the shop Jim? I see the rental in your driveway.”
    “What rental, Bob?”
    “That Malibu in your drive.”
    “I bought that today.”
    “Cool, you can get good deals on used rentals, did you pay like $9k or $10k?”
    “It’s brand new, I got 0% interest for 60 months.”
    “Sounds like you made out, Buddy.”
    Thanksgiving and family is in town:
    gpaw: “Is your neighbors car in the shop?”
    Bob: “No, why?”
    gpaw: “I see a Malibu.”
    Bob: “He bought that new.”
    gpaw: “Oh.”

  • avatar
    cwallace

    Maybe GM should be solely a fleet manufacturer. Narrow the product line down to two models each for whatever the rental car categories are these days, and keep knocking them together every year until they become so cheap you can’t possibly lose money (Crown Victoria, here’s looking at you).

    Residual value would be virtually nil when they come out of the fleets, but that would still only be a few bucks less than presently.

  • avatar
    SkiD666

    So were the 53% all ‘new’ Malibu’s or mostly Classics?
    Were they 2008 models or 2009?
    Were they all rental or ‘real’ fleet?
    Was fleet price less than ‘Employee’ pricing?

    As bad as 53% sounds, should GM (or other manufacturers) be automatically condemed without knowing all the facts?

    Oh and would the Vibe’s increase in sales be attributed to fleets or just the fact that it is a better buy than the Matrix?

    The truth is that in the short term GM needs cash flow more than it needs profits, sounds bad, but it is the reality.

  • avatar
    jaje

    When does GM ever tell us the truth anyway. It’s not like I believed them when they said they’d reduce fleet sales or tried to hide the slowing sales the past 2 years and said it was only b/c of reduction in fleet sales. It’s not like GM and the others were shifting a large proportion of fleet sales to dealers in order to count them as retail. It’s not like when I believe them when they say that their cars are world beaters or only suffer from a perception gap, etc. It’s not like I ever trust a word they say anymore. I’ll give it back to them and promise to buy another GM truck next year and well not do it.

  • avatar
    Redbarchetta

    There went the resale for all those people who paid sticker for “The car you can’t ignore”. You sure wont be able to ignore the depreciation. GM always working to destroy customer trust.

    The good news is teh Malibu wasn’t a horrible car when I looked at it and we should all be able to get one cheap in 6 months when the rentals flood the market.

  • avatar
    John Horner

    Fleet only would never support GM’s cost structure. The only surviving fleet only company in the world makes the London Cab.

    Fleet can work well as a minority portion of a company’s sales strategy but it should never be the lynch-pin.

  • avatar
    Point Given

    SkiD666

    – Fleet pricing is a whole other level than employee pricing. I saw a new dodge with 8500 off invoice for a fleet price, my price at a rental/leasing company is significantly more.

  • avatar
    Buick61

    Sigh.

    Was this all the ’09 Malibu, or were ’08 “Classic” Malibus?

    And it says fleet Sales were up, but TTAC uninterested in figuring out the breakdown between corporate, government, and rental fleet sales. For all TTAC knows, only 20% did go to rental fleets, and the rest went to companies and the government.

    Finally, what of the other automakers? Toyota has been steadily increasing its fleet sales, including to rental fleets, for the past couple of years. So, too, Nissan and Hyundai. Yet, there’s no mention of any comparable figures from those companies…

  • avatar
    SherbornSean

    John Horner: “Fleet can work well as a minority portion of a company’s sales strategy but it should never be the lynch-pin.”

    OK, then explain the retail strategy behind the Dodge Avenger.

  • avatar
    Usta Bee

    Unless they can keep the fleet sales up October is going to be a real interesting month for GM.

  • avatar
    ronin

    By way of comparison, can we have the numbers of fleet sales for “non-domestics?”

    Every time I fly into L.A. Hertz gives me either a Camry or a Mazda (3 or 6). These boys also do fleet.

  • avatar
    Conslaw

    Well at least GM can get the fleets to buy its cars. Chrysler can’t even do that anymore. Ford is not what it once was, either. I rented a car this summer from Hertz, used to be owned by Ford and was a Ford bastion. The car they initially tried to put me in was a Toyota Camry. Their minivans were mostly Siennas, and they had quite a few Corollas and Priora (Priuses).

  • avatar
    Bunter1

    For those who would like a “who does how much fleet, and where” Frank did an article on the mid-year numbers from Fleet-Central.
    IIRC the Camry is only 10-12% total fleet.

    I think RFs point stands. GMs retail-even with “employee pricing” was right in the same hole as everyone else. And Honda and Toy are holding the line on incentives.
    There is no evidence that the consumer is responding to GMs products.

    I’ve been expecting this, they piled up numbers with a fleet run last fall (Aug-Oct) and the psychophants and the auto-press got all excited about a big GM turnaround. I predicted they would tank soon after and when the November numbers showed up the “turnaround” talk evaporated.

    Look for more of the same, they have learned zip.

    Cheerio,

    Bunter

  • avatar
    Captain Tungsten

    “I beg to differ. It’s clear from the article and the numbers that GM’s using fleet sales MORE THAN BEFORE. In other words, releative to itself. Relative to its own promises” – RF

    I’m not arguing that GM didn’t do what you claim, but I think you are stretching to read that into the CNN article. It may be clear to YOU from the article, and their writing does appear to try to draw you to that conclusion, but the article doesn’t actually SAY that, nor give any good evidence of that. And none has popped up in this thread today (i miss Frank….snif…)

    The press release reports an increase in the transaction price of the Malibu, which shouldn’t be true if the bulk of the Malibu fleet sales went into daily rental (and THAT assumes that daily rental pricing has stayed flat, remember that the industry has pulled a lot of volume out of there already) If the Malibu fleet sales are profitable (as some are), where is the problem? Again, without more information, there is no “there” there….

    And, from my recent experience, the GM fleet queen is the Trailblazer. I dare you to rent a midsize car from Avis and NOT get a Trailblazer.

  • avatar
    Buick61

    RayH :
    October 2nd, 2008 at 8:35 am

    I was reading a thread about GM falling 16% on GMInsideNews for shoots and giggles last night. Not one person mentioned the “great” showing might be a result of fleet sales, although around post 70, someone guessed they’d do that next month.

    Oh for crying out loud. About an hour before you posted this, GMI put up an entire thread devoted to this story. The sudden anti-GMI jihad on TTAC is seriously wack.

    http://www.gminsidenews.com/forums/f12/gm-boosted-september-results-fleet-sales-malibu-only-47-retail-69812/


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