GM Betting on Commercial Sales in Bid to Bruise Ford

Steph Willems
by Steph Willems
gm betting on commercial sales in bid to bruise ford

With passenger cars deserting the ranks, the battle for sales and profit in Detroit will be waged almost solely with trucks. You’ve already seen what General Motors has in store for HD truck buyers, and Fiat Chrysler’s expected to reveal its own alternative to Ford’s Super Duty line before long.

However, as lucrative as half-tons and HDs are, GM’s looking forward to challenging Ford with its new, medium-duty Silverado line, revealed earlier this year. With this truck, The General hopes to turn medium-duty sales into commercial demand for lower-rung pickups and SUVs.

The more profitable side of fleet sales — commercial sales — is square in GM’s sights, Reuters reports. Last year, the automaker announced a plan to boost profitability by stemming the flow of vehicles, mainly cars, to rental fleets. Now, it’s stemming the flow of cars to retail buyers in order to turn out the lights in underperforming plants. That leaves higher-margin trucks to generate extra cash for the automaker.

In the commercial truck field, Ford is king, but GM’s making headway. The automaker recorded a 24 percent year-over-year rise in commercial sales in November, even as retail sales dropped 1 percent. (GM now keeps its full sales stats away from prying eyes, releasing the data only on a quarterly basis.)

At the same time, year-to-date rental sales have fallen to 10 percent of GM’s volume, down from 15.8 percent five years ago. Over that term, commercial sales rose from 7.8 percent of total volume to 11 percent.

This week, GM and partner Navistar International Corp. kick off production of the Silverado 4500, 5500, and 6500 with the hope of attracting orders from public works departments, utilities, and construction companies. The company hopes that, as seen with other medium-duty trucks, these sales translate into purchases of smaller GM vehicles. The industry average is about six light trucks and cars for the purchase of every medium-duty truck.

GM jettisoned its medium-duty truck line during the 2009 bankruptcy. Now, the line returns — with much more corporate branding than before, plus a direct lineage to the well-known Silverado line — just as the automaker dives deep into its streamlining efforts.

As for GM’s main competitor, Ford’s commercial fleet sales amounted to 12.4 percent of total volume in November, up 2.1 points over last November’s tally. Year to date, the Blue Oval’s commercial volume stands at 12.9 percent, up one point from last year. In contrast, rental sales of 7.5 percent last month represent a 2.9 percent drop over the same period last year.

[Images: General Motors]

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  • WallMeerkat WallMeerkat on Dec 05, 2018

    For medium-heavy duty would they be better badged as a GMC? To me Chevy is consumer grade, GMC is professional commercial grade.

    • Orioncanam Orioncanam on Dec 05, 2018

      In days of old a GMC franchise sold and serviced everything from a Sprint to an Astro 95. I feel for the franchise's who coughed up the big $$$$ to get one of these franchise's.

  • Orioncanam Orioncanam on Dec 05, 2018

    The ultimate goal will be to make money selling overpriced parts from GM CCA ( confused, conceited & arrogant)

  • Tassos BTW I thought this silly thing was always called the "Wienermobile".
  • Tassos I have a first cousin with same first and last name as my own, 17 years my junior even tho he is the son of my father's older brother, who has a summer home in the same country I do, and has bought a local A3 5-door hatch kinds thing, quite old by now.Last year he told me the thing broke down and he had to do major major repairs, replace the whole engine and other stuff, and had to rent a car for two weeks in a touristy location, and amazingly he paid more for the rental ( Euro1,500, or $1,650-$1,700) than for all the repairs, which of course were not done at the dealer (I doubt there was a dealer there anyway)
  • Tassos VW's EV program losses have already been horrific, and with (guess, Caveman!) the Berlin-Brandenburg Gigafactory growing by leaps and bounds, the future was already quite grim for VW and the VW Group.THis shutdown will not be so temporary.The German Government may have to reach in its deep pockets, no matter how much it hates to spend $, and bail it out."too big to fail"?
  • Billccm I had a 1980 TC3 Horizon and that car was as reliable as the sun. Underappreciated for sure.
  • Inside Looking Out I did not notice, did they mention climate change? How they are going to fight climate change, racism and gender discrimination. I mean collective Big 3.