Auto sales are an enjoying an upswing in the US market, as US manufacturers ride a tidal wave of strong truck and SUV sales.
Similarly, GM has also padded its coffers with potent performances by the Chevrolet Colorado/GMC Canyon and its lineup of full-size SUVs like the Chevrolet Tahoe, which sit on the GMT K2XX platform. Look a litter closer, however, and you’ll notice its not all roses for large-volume OEMs like GM and Toyota.
Unforeseen market fluctuations, like slumping gas prices, have stunted retail sales of high-volume vehicles like the Toyota Camry and Chevrolet Cruze, General Motor’s best-selling vehicle worldwide.
Consequently, GM and other OEMs have off-set part of the retail sales slump by shipping more vehicles to retail fleets, a practice that “can keeps production lines humming but can dent resale values and clip margins,” according to the Wall Street Journal (subscription required).
The news outlet also notes that 21 percent of compact car sales and 20 percent of midsize cars sold during the first quarter of the sales year ended up on fleet lots, up from 17 percent from the previous year. Meanwhile, subcompact car accounted for 28 percent of the rental mix, up four percent from 2014.
It’s a slightly troubling sign for an industry that has seen enjoyed its strongest sales in more than a decade. And GM, especially, should take note.
The Chevrolet Cruze had the highest rate of fleet sales during the quarter, accounting for 45 percent (!) of sales in the period, followed by the Nissan Altima (27 percent), Toyota Camry (25 percent) and Chrysler 200 (39 percent).
While the current Cruze can be crowned as a fleet queen, we’re quite certain the incoming 2016 Chevrolet Cruze has what it takes to shift sales back to retail and, hopefully, pump more life into the sagging segment.
We’ll know more once it’s officially unveiled June 24th.