Re: G M is still number one in 2006

Ya right, that is why there account executives where always in our offices trying to get some more of the fleet business. Toyota and Honda and most every other manufacture sells to fleet if they can

In the order banks the first vehicles scheduled for each build cycle on the assembly line are dealers RETAIL orders than dealer stock orders, dealers fleet orders are last. It is only when the assembly plant is in a position to fill a very large order for a fleet that those orders are given preference, and the reason is to build them all at the some time to move the line faster. Where do you come up with your strange ideas?

mike

Gee, then why is GM trying *not* to make so many fleet sales?

(GM sales and marketing chief, Mark) LaNeve said GM's fleet sales in May will be down 20,000 units, "which will hurt our year-over-year comparison." Overall, GM fleet sales will be down in 2006 "to a level that makes sense."

"GM, though, was able to continue lowering its fleet sales and incentives substantially. The company reported that fleet sales, typically less-profitable sales to the rental-car companies, businesses and the government, were down 16%."

"GM's incentive spending kept plummeting, partially explaining the falling sales. GM's incentive spending declined 30.6% in May compared with a year ago, for an average of $2,781 per vehicle, said Autodata Corp., a research firm in Woodcliff Lake, N.J. Automakers do not publicly report how much they spend on incentives, which eat into profits, so several firms estimate the spending."

And, in Canada:

"Some analysts are predicting that General Motors Corp. will be hit hardest because it is trying to wean itself off incentives and fleet sales, "

So lets summarize. GM is spending $2,781 per vehicle in retail incentives and fleet sales are less profitable than that. GM actually wants to reduce the number of such sales which suggests that they don't even cover their variable costs.

I have posted links to this information for you before. Quit trying to make it sound like fleet sales are profit generators. Otherwise, explain why GM is trying to reduce them. It's not like they are short of cars to sell.

In other words, fleet sales are intended to dump excess capacity. GM is pledging to reduce output rather than sell the excess to fleets. That only makes sense if fleet sales are unprofitable. Of course, the entire corporation is wildly unprofitable, so you know that fleet sales must really be financially unattractive.

If Honda and Toyota are trying to make fleet sales, it must be at prices which are profitable. No wonder they are losing out to GM and Ford dumping cars below cost.

GM has $300.000.000.000 debt and growing

It will be interesting to see how far banks are willing to let the debt grow

What is really the point of producing cars just to increase the debt?

GM is losing more than $1000 on each car they make

It will also be interesting to see who is going to lose most when GM finally rolls over that is when the banks have the guts to stop lending them money

There will be a lot of other bankruptcies to follow the big one

Gord> >

GM and Ford have produced way too many cars for years -- many more than they can sell profitably. In order to sell these excess vehicles, they offer incentives. Many times, selling the huge supply overage requires huge incentives -- which of course reduces (or in this case eliminates) profitability. They have done this way too much and for way too long and they are drowning in the resulting red ink. The obvious answer is to stop making too many cars, but they're having difficulty doing this. Ford and GM are configured to make lots and lots of cars and the fixed costs are killing them. If they reduce the number of cars produced without changing the underlying problems of being configured to make so many vehicles (i.e., number and costs of employees and too many plants, etc, etc, etc) it may not help at all and may actually make things worse. Of course, they need to make some vehicles -- besides SUV's and pickups

-- that people want to buy too. Also, they need to solve the huge union contract (salary and healthcare) issues. All in all, not a very pretty picture.

Simple, GM has dramatically reduced the MSRP on all of their vehicles, there is no need to offer an extra $600 discount to its dealers that sell to fleets, particularly those dealers that sell primarily to fleets.

mike hunt

You live in a dream wold, no manufacture sells vehicles to their dealers below cost and no dealer sell to a customer below cost. GM has had operatinh lossed but they still make a profit on every vehcile they sell. MSRP has nothing to do with market pricing and economies of scale determins the build cost. You would be srprise if you knew what it actully cost to build any vehicle and the small differace in the build price of a vehicle with an MSRP of 25K and one with an MSRP of 45K.

mike hunt

It is not often I can agree with you

Mike Hunter wrote:

It appears you are talking to yourself again, they have a name and a place for people that do that LOL

I wonder it Honda and Toyota are trying that hard. Rental fleets a noted for buying excess stock, usually of slow moving lines.

That's true. A few weeks my brother in law got a Ford Explorer for the mid sized car rate. Admittedly that rental location usually rents the Explorer in the winter for the local ski hills.

A few years ago in may Atlanta Budget wanted me to take a Cherokee for the mid sized car rate. Not being familiar with it or even interested in it, I waited until a mid sized car came in.

Except for at least one GM car. The Impalla is selling so well they are keeping production volumes up. It does sell very well as a rental or taxi.

That has been obvious with the big problems of lost high priced SUV volume. Thanks for admitting it.

You mean like all the Corollas and Civic they rent? Me things you are confusing fleets with rental car companies. ;)

mike hunt

Actually both GM and Ford car and smaller SUV sales are up, it the larger SUVs that have slowed.

mike hunt

You are such a lying sack of shit, Mike. Admit it, you just make this stuff up out of thin air. If you told me my mother loved me, I would call her and check it out.

As of May 31, GM car sales are down 13% while trucks are only down 4%. Not what you expected, huh? The story is that the redesigned BIG SUVs have been selling much better than the old ones did last year. That seems to be cooling quickly with $4.00 gas fears and the realization that they are not much better than the old ones. Ford car sales are up 8% but their truck sales are down 9%.

All this is measured on the basis of 2005 sales which were so bad that the "big three" ended up offering huge discounts to retail and fleet buyers. So will they offer the same discounts this year, Mike? Or will they shut down the production line? Or will Prince Charming arrive and buy up all those vehicles at full MSRP?

And so the fleets will buy only about a third as many GM cars, even though they are selling at the same price?