General Motors is strengthening its competition with rival Ford Motor’s lead in sales to U.S. commercial fleets to prop up profit targets amid slowing consumer demand, according to executives at the No. 1 U.S. automaker.
GM is counting on new medium-duty Silverados – equipped as tow trucks, utility bucket trucks and delivery trucks – to raise demand for its light-duty trucks and cars. Automakers estimate for each medium-duty truck a corporate customer buys, they buy up to six pickup trucks, SUVs, or passenger cars.
The demand for automakers to support U.S. sales and keep plants humming was showed last week when GM slated five North American factories for possible closure, including two constructing the type of sedan that has fallen out of favor with American customers. Ford declared it would shuffle workers from slower to busier plants.
Majority of significant automakers on Monday also reported decreased U.S. November sales.
But a 24.1 percent rise in commercial fleet sales in November against the same month in last year helped GM offset a 1 percent retail sales decline, according to a source knowledgeable on figures GM does not make public on a monthly basis.
GM North America chief Alan Batey informed Reuters in a recent interview the automaker has followed a long-term strategy to slash lower-margin rental fleet sales and increase more lucrative commercial sales.
GM’s rental sales are about 10 percent of total sales in 2018, dropping 15.8 percent in 2013, according to industry data. In the same period, GM’s commercial sales have increased to over 11 percent from 7.8 percent of sales.
Batey stated production of GM’s medium-duty trucks, which starts this week under a partnership with truck maker Navistar International as an addition of the Chevrolet Silverado pickup truck model line, is a milestone in the automaker’s move to boost market share.
