GM Boosted September Results With Fleet Sales; Malibu Was Only 47% Retail

[Perian]

Link: http://news.morningstar.com/newsnet/...00806_univ.xml

DETROIT - More than half of Chevrolet Malibu sedans sold last month by General Motors Corp. went to rental car companies and other fleets, an ominous sign for one of the auto maker's most-promising new vehicles.

The Malibu, which received a dramatic make-over last year GM described as its best effort yet on a passenger car, was supposed to bring an end to the long-held practice of overproducing cars and then unloading them at a discount to rental car companies.

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.

GM's reliance on fleet sales to boost demand wasn't limited to the Malibu. During the month, sales of vehicles to fleet customers jumped 17% compared to September 2007, while retail sales dropped 26%.

Article continues at link.

[Perian]

I can confirm this in a very small way.

Last weekend I put 430 miles on a 2009 Malibu LS 2.4L from Hertz. It had only 1,100 miles on it when I picked it up. Interesting - the 09 Malibu is now a class "F" vehicle from Hertz - the same as the Impala. The Malibu is a really great car - I averaged 32.7 miles per gallon in mostly highway driving and loved the way it drove - and this was a 2.4L LS base vehicle. The Hertz return clerk said that they were very popular.

Now I understand why Ford was down so much more than GM - Perhaps they held the line with fleet sales.

This "problem" may continue in the next few months unless the retail side improves. In September, GM made 26,502 Malibu units - 6,777 more than were sold.

UPDATE:

Customer Cash Back:
2008 Malibu 4Cyl: $500
2008 Malibu 6Cyl: $1000 ($2000 in some states)
2008 Malibu Hybrid: $500
2009 Malibu 4Cyl: None
2009 Malibu 6Cyl: $500

Targeted Incentives On 2008/2009 Malibu:
GMAC SL/SB w/ a contract end date thru 6/30/09 or Non-GMAC Lessees w/ a contract end date thru 2/2/09:
$3,000 Purchase Bonus Cash on ’09 Malibu 6cyl
$2,000 Purchase Bonus Cash on ALL '08 Malibu models, '09 Malibu 4cyl
CA-FL Residents: '08 Malibu (excluding Hybrid) $1,000 Conquest Bonus Cash thru 11/3/08

[dindak]

This could be a seasonal thing with a couple of a rental companies turning over some of their fleet.

I wouldn't read too much into 1 month. All the Malibus I see are retail sales, not yet seen a 08/09 rental other than the "classic".

[drew770]

I hate to see such a great car like the Malibu dumped into fleet sales but GM has to earn a profit some how!!

[b4z]

Can we believe anything GM tells us?

[dederer]

The real issue is did GM make money from the sales of this vehicle? Toyota stopped manufacturing vehicles becuase of low sales, but GM kept selling at reduced prices. Who lost the most money?

[espo19047]

The fall is when all of the drug companies replce the cars for the sales people. I sold 5 Malibus out of stock that where reported fleet to a survey company in NY. They went at $200 over invoice which is more then the retail units went for last month. Not all fleet sales are losers.

[A Bum In A Bus]

September is a high replacement month in the rental business, 2008 models are replaced with 2009 models after summer driving. You really cannot read anything into this, the following months will be much lower. The only way to get the actual percentage is to wait until the model year has ended.

[Ambalanche]

I've seen a ton of Malibu's in rental fleets lately.

[dindak]

I have seen a ton of Camry's in rental lots and cab fleets lately also.

[Ming]

The Malibu, which received a dramatic make-over last year GM described as its best effort yet on a passenger car, was supposed to bring an end to the long-held practice of overproducing cars and then unloading them at a discount to rental car companies.

The assumption here is that GM "overproduced". I think rather they just scrambled to make a better sales month with existing inventory than the near apocalyptic one Ford and even Toyota had.

If that meant offloading some more to fleet because of a suddenly dire financial 9/11 on Wall Street with psychological effects and a credit crunch on Main Street, it doesn't necessarily mean that they build them for fleet like in years past.

It could well have been a directive from above to sell, sell, sell to fleet and anyone, with employee discounts, with anything to avoid a 35 or 40 percent sales drop.

And what did it do? It gave GM the biggest share gain among major automakers in the US while Toyota and Ford were tanking and avoided doomsday stories for GM.

[chevydlrmn]

53% for one month seems high, but the percentage to look at is year to date.

[hotrod1949]

September is also a month to lower field stock of previous model year vehicles. It would be interesting to see those numbers, and the change from end of August to beginning of October.

[nadepalma]

Originally Posted by Perian

This "problem" may continue in the next few months unless the retail side improves. In September, GM made 26,502 Malibu units - 6,777 more than were sold.

Originally Posted by dindak

This could be a seasonal thing with a couple of a rental companies turning over some of their fleet.

I wouldn't read too much into 1 month. All the Malibus I see are retail sales, not yet seen a 08/09 rental other than the "classic".

Originally Posted by espo19047

The fall is when all of the drug companies replce the cars for the sales people. I sold 5 Malibus out of stock that where reported fleet to a survey company in NY. They went at $200 over invoice which is more then the retail units went for last month. Not all fleet sales are losers.

Originally Posted by A Bum In A Bus

September is a high replacement month in the rental business, 2008 models are replaced with 2009 models after summer driving. You really cannot read anything into this, the following months will be much lower. The only way to get the actual percentage is to wait until the model year has ended.

At first blush reading the article, I thought that GM had fouled things up again.

But after reading all of your comments, I see the logic in it all. Good points.

I guess we'll have to see what happens in the next few months - but if their overall Fleet sales are down for the year compared with the old Malibu, then that's a victory as far as I'm concerned.

[civilzues]

I thought the Malibu fleet was the the classic? Am I wrong or is GM producing both?