Daily Management Review

Ford To Be Given Competition By GM In U.S. Commercial Fleet Sales


12/04/2018




Ford To Be Given Competition By GM In U.S. Commercial Fleet Sales
The leadership position of Ford Motor Co in the US commercial fleets is to be challenged by General Motors Co in terms of sales in order to increase profit margins because the company is facing reduction in consumer demand.
 
GM wants to increase demand and sale of light-duty trucks and cars through its soon to be launched new medium-duty Silverados which can serve as tow trucks, utility bucket trucks and delivery trucks. According to estimates by automakers, whenever a corporate customer makes a purchase of a medium-duty truck, they also buys up to six passenger cars or pickup trucks or SUVs.
 
The necessity of the US car and auto manufacturers to continue the factories running well they should also increase their US sales especially after the largest US auto maker GM announced last week its plans to potentially close down its five North American factories which includes two sedan models that the company says has the lowest demand in the US. The company however has announced that it would shift workers from plants that manufacture those models that have fallen out of favour to which makes those that are in demand.
 
A drop in November sales was reported by most of the major automakers.
 
But according to reports quoting sources with knowledge of figures which GM does not make public on a monthly basis, a 1 per cent drop in retail sale of the company was offset by a 24.1 percent jump in commercial fleet sales by the company in November compared to the same month a year ago.
 
GM wants to reduce the sale of vehicles to rental companies that offer a lower margin in the long term and focus on those that offer more from sale to commercial clients, the company’s North America chief Alan Batey had said in an interview to Reuters recently.
 
According to industry data, retail sale accounted for about 10 per cent of the total rental sale of GM this year compared to 15.8 per cent clocked by the company in 2013. While in the same period, the company noted the share of its commercial sale of total sale at more than 11 per cent compared to 7.8 per cent in 2013.
 
This week GM will begin production of medium-duty trucks which is crucial in the strategy of the US automaker to increase market share. That truck would be manufactured in partnership with truck maker Navistar International Corp and is being seen as an extension of the Chevrolet Silverado pickup truck model.
 
It bankruptcy in 2009 had forced GM to exit the segment.
 
Companies like engineering-services firm U.S. Infrastructure Co are the ones that GM and Ford would be competing to take business from in this segment. About 9000 vehicles - most of which are light-duty Chevrolet Colorado pickup trucks, is owned by U.S. Infrastructure Co. USIC is engaged in the business activity of marking cable lines, water pipes and other underground infrastructure prior to the ground being dug up by contractors.
 
(Source:www.reuters.com)






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