It Hertz: Nearly 50 Percent Of Outgoing Chevy Cruze Sales In Q1 Went To Fleets
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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.
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GM moved too slowly in getting the new Cruze Stateside. The segment is very competitive, especially with the Korean automakers offering compacts almost the length of midsizers.
Also, a superb second generation Cruze will help Chevrolet build further trust among buyers. Brand transformation takes time and Chevrolet will gain new buyers once the new mini Impala – styled Cruze hits lots.
Not really as it has been selling well even with no fleet sales till this year. This year is a year of transition and fleet sales are the chosen path here. Most new car buyers are waiting for the new car that will be here in August.
People complain if GM rushes a model to market and now they complain because they are making it right before they do. You have to choose.
For years the Asian makers have released cars overseas a year or more ahead of when we got them. They too had teething issues at the start that generally were sorted on the more forgiving home market. GM today lets China sort out the major systems then tailors the car to the American market.
The Cruze will be here just when it needs to be in the very near future.
I look at it this way, all of these fleet cars will eventually end up on the used car lots for people to buy and therefore still get into a Chevy Cruze and a pretty good car at that. I see it as a win win situation in that respect. 🙂
How much profit is there to be had when a flood of Cruzes hit the resale market?
Lots of miles, little or no warranty left,
an overabundance of choice, and a (hopefully new and improved) 2016 Cruze over in the ‘good’ part of the dealership…hard to see that as a recipe for success.
But wait here is the truth.
This car will be in classic mode next year after many years on the market. There is a large number of Cruze already out there. These will be sold mostly to fleets as the new model will be on the market already.
You will find few people worried about resale at this point as there are so many too choose from it will not affect their values much as most of these cars already have50K miles or more. Also the people buying these cars now are generally getting large discounts like are added at the end of the life cycle so they are saving up front.
In the end everyone is happy as they have gotten a good price and GM is still making money.
We have seen this before with the old Malibu and even recently with the Impala. and Captiva.
Most MFG do this.