New Dog, Old Tricks?

It’s a party line from the General we’ve all come to know well, “reduce fleet sales to rental companies because retail is more profitable.”

But as Mrs. Mary sings the virtues of the strategy, it would seem some share is more equal than others.

“Our rental reduction strategy is clearly divergent from our key competitors,” Kurt McNeil, GM’s vice president of sales operations said to Automotive News “It’s playing a critical role in our efforts to strengthen our brands, improve our residual values and build the fundamental health of our business.”

When May numbers dropped last week, GM said retail share is up more than 1 percent through May and that retail share had risen 0.6 percentage points. GM called it “the largest retail share increase of any full-line automaker.”

But according to some dealers, it’s all just a surface dance.

The crux of the issue seems to be CTP, General Motors Courtesy Transportation Program.

GM revamped CTP a few years back under the auspice of creating loyalty and getting more people to try Chevy, Buick and GMC vehicles:

Here’s how the program works. Dealers are given $500 for each vehicle they put into their courtesy transportation fleet, at which time GM records it as a new-vehicle sale. GM sets the number of vehicles that dealers can put into the fleet; dealers decide the mix of vehicles.

The cars and trucks stay in the rental fleet for either 90 days or 7,500 miles, whichever comes first. Dealers can provide the cars to service customers or loan them out for test drives of up to three days. Or they can rent them to customers who want to drive them longer.

When the vehicle comes out of the courtesy transportation fleet, the dealer is given two $250 “service value certificates,” which the dealer can apply to any new-car sale.

In operation, CTP essentially incentivizes dealer to add slow-selling models to their loaner fleets, the self registrations are then counted as “retail sales.”

Of course GM isn’t the only one who’s doing it, but the General is certainly the only one crowing their virtuous “increasing retail share.”

Just check out the comments from this recent Automotive News piece on GM’s fleet cuts:

ctp 2ctp 1

And all of this would seem to track back to GM’s mind boggling decision to continue without a CMO. There is no cohesive strategy, the individual brands get to to do whatever they want without answering to an overarching corporate strategy.

The effect of which is leaving some of the most competitive General Motors products in years languishing. XT5, Acadia, Cruze, Malibu and to a degree Camaro might as well not exist to new car shoppers. Excellent products mean little if they can’t be rolled out in an effective manner.

If GM would just get it’s marketing sorted out they wouldn’t have to resort to the incestuous practice of jamming up CTP for the sake of claiming “the largest retail share increase of any full-line automaker.”

Do it right and you get to say that without the reindeer games…

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