General Motors Is Still Crushing Ford
February 6, 2016
In the sales battle between America's top two automakers, there has been a clear winner for the past year or so. General Motors (NYSE:GM) has bounced back strongly from the ignition switch recall scandal that emerged two years ago, gaining ground against top rival Ford Motor (NYSE:F).
This trend continued in January. While the overall sales growth numbers for GM and Ford didn't look that different, the underlying trends are far more favorable for the General.
GM has a strong start
In January, General Motors posted a 0.5% year over year gain in U.S. deliveries. This masked a strong performance on the retail side. Retail sales actually rose 8.9% year over year, but this was offset by a decline in daily rental sales.
GM has been deliberately cutting back on sales to rental car companies in the past year or two. Not only do automakers earn low margins on most rental car sales, the result is a steady flow of used cars that will drive down residual values for those models. That in turn impacts retail sales by increasing leasing costs and reducing trade-in values.
General Motors cut back on sales to daily rental companies by nearly 13,000 vehicles last month. If GM had kept daily rental sales flat, it would have generated a roughly 7% increase in vehicle deliveries, rather than the 0.5% gain it reported.
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