['01LS1]

Thank you @MEDISIN for post #37.

For people thinking that rental car sales numbers are great, please read at link. It is from July 2015 dealing with sales numbers. But still explains some of the past sins of auto makers & how important retail sales really are.
http://www.autonews.com/article/2015...-sales-picture

[MEDISIN]

Originally Posted by germanicus

I really question this. You are proposing they simply take the cheapest vehicles with no assessment of market forces/reliability/consumer desirability indices?

Precisely. I have been Avis Preferred Plus (name has changed over the years) for 22 years and National Executive Elite for 18 years and have never once been asked what I prefer to rent. I sat next to a fleet manager for a large pharma company at a charity dinner in 2012 and this very topic came up. How do you decide what to buy when you're ordering 1000 cars at a time? Price was the first factor considered. Second was reliability over the predetermined miles they would keep the car 20k for some cars, 50k for others. This isn't surprising, price is the largest factor impacting retail sales of cars too within respective sales segments. The cheaper car almost always outsells the expensive ones.

Originally Posted by germanicus

If this were the case all rental fleets would be 100% Toyota Prius.

Not remotely. Hybrid's are not the cheapest to buy or the most reliable, or easiest to resell.

Originally Posted by germanicus

Rental companies have to balance costs to maintain their fleet with having cars desired by their customers.

Again, no one chooses which rental car company to rent from based on cars they desire. The exception would be the high end (exotics) from Hertz which you can't find anywhere else. Customers choose based on daily rate for a segment of car they need. Sure, rental location, convenience, customer loyalty programs factor in, but car preference does not.

Originally Posted by germanicus

Where are you getting the net profit assessments?

Again, no one knows how much net profit are built into these cars. Most mainstream vehicles yield $500-2,000 profit. Luxury cars ~$5,000. Trucks ~$10,000. Porsche ~ $17,000.

Originally Posted by germanicus

Higher prices are meaningless without knowing all other factors. There is a huge cost to delivering vehicles that sit unsold for 6 months on dealer lots. It indicates a lack of knowing their market demand. Adding a third shift just to have inventory go over 6 month periods last year. Camaro sales are at historic lows. This is not according to plan.

Can you share "the plan" with us? GM is one of the largest automakers on the planet. Given their financial performance, I doubt any shareholder is going to whine about inventory levels appearing high.

[newmoon]

Originally Posted by Michigan1LTRS

Yep Camaro wins again. That's all I needed to see. Pony car king in retail sales again. Later

Is this part of the new math where less is more or is it a participation trophy where 3rd place makes you a winner. Either way I see a whole lot more wins coming up for this new Gen Camaro as with the into of the updated Mustang I am sure it will make a big jump into 1st place or I should say last place with the highest volume sold.

[hotlap]

Originally Posted by newmoon

So I guess what your saying is that Chevy wouldn't sell the car to any fleet retailers if they requested? Or is it that fleet retailers are simply not requesting? It would be an interesting answer either way. Isn't the reason why Chevy is thinking about less option packages to be more competitive, if they were happy with 3rd place why bother?

Sales to rental is controlled

Batey bets on power of captive finance arm

June 12, 2017 @ 12:01 am

DETROIT — General Motors plans to keep reducing the flow of vehicles from its plants to U.S. rental lots at least through 2018, continuing a strategy that has helped the automaker's North American operations pile up more than $26 billion in profits under CEO Mary Barra even as its overall market share keeps sliding.

Alan Batey, GM's president of North America, told Automotive News last
week that sales to daily-rental fleets would fall by about 50,000 units this year and an unspecified amount in 2018. That would represent four straight years of declines for GM's rental deliveries, which already dropped from 16.1 percent of its total U.S. sales in 2014 to 11.7 percent in 2016, according to R.L. Polk registration data provided by the company. The additional reductions Batey discussed likely would drop that proportion into single digits.

"We like the rent-a-car business from a seats-in-seats perspective, because it's great test drives and it's a great opportunity to expose new people to our products," Batey said. "We don't like it when it's bringing too many nearly new vehicles back into the market to compete with our new business and compress our resale values."

Such discipline represents a major philosophical shift for a company that used to rely on money-losing fleet sales to keep its assembly lines running because its union contracts made cutting production extremely costly — and often because executives' bonuses and bragging rights hung in the balance.

Barra has moved GM away from prioritizing size at the expense of its bottom line, abandoning some large global markets where it was unprofitable in addition to emphasizing retail sales on the domestic front.

Stronger leasing
GM isn't shunning all varieties of fleet; its more lucrative commercial and government business is on the rise. It also has funneled 10,000 vehicles into its Maven short-term rental service since its launch in early 2016

GM's U.S. retail sales are up 0.3 percent this year through May, while total industry sales have slipped 2 percent.

By selling fewer vehicles to Enterprise and Hertz, GM can boost residual values and improve the economics of its leasing business, Batey said. That, in turn, puts customers in the market for a new vehicle more often.

"What's different today from seven or eight years ago is we now have a full captive in GM Financial that's really gaining momentum and gaining steam," Batey said. "We're able to really look at this holistically. We want to have a very strong lease portfolio, and we want to manage the back end of that in a very controlled manner."

Rising inventory

GM's discipline has been relatively steadfast even as its inventory has climbed to the highest level in nearly a decade. Batey said the build-up is designed to help GM weather a significant amount of production downtime in the coming months to retool for upcoming pickup and SUV models. But if the second half of the year is weaker than GM projected, it will test executives' resolve to avoid the profit-killing relief valves historically used in such situations, including higher incentives and more rental deliveries.

Batey insists the automaker is well positioned, even with about 44 percent more inventory than it had a year ago.

"You have to react to what's happening in the market," he said. "We don't control the external environment, but we have to react appropriately once we get clarity. We'll take whatever actions we need to ensure that we keep our discipline in the marketplace."

[Zack46]

Originally Posted by 13vertss/r's

All I see is that Camaro wins the common people purchase. These are people who go to the lots and buy the best car for them. Camaro sells more. I see Ford can't win in this category, so they unload 30% to fleet so they can save face and make it look like there still selling better. So if that makes you feel good, that's fine, but you know it's just smoke and mirrors.

[hotlap]

Originally Posted by germanicus

Higher prices are meaningless without knowing all other factors. There is a huge cost to delivering vehicles that sit unsold for 6 months on dealer lots. It indicates a lack of knowing their market demand. Adding a third shift just to have inventory go over 6 month periods last year. Camaro sales are at historic lows. This is not according to plan.

The Lansing plant also builds ATS and CTS. The 2016 sales of ATS dropped 29% and CTS dropped 48% relative to 2014. It would be interesting to know how that factored into the overcapcity situation.

[ssrs2lt]

I can't imagine 4000-5000 sales a month is / was the goal. The fleet - rental sales is obviously in the GM business plan..it will be interesting to see if GM shifts away from this as the car sales continue to tank. There's still a large import car sold number they have not tapped into. No matter the spin being last blows

[germanicus]

Originally Posted by MEDISIN

Precisely. I have been Avis Preferred Plus (name has changed over the years) for 22 years and National Executive Elite for 18 years and have never once been asked what I prefer to rent. I sat next to a fleet manager for a large pharma company at a charity dinner in 2012 and this very topic came up.

So, you are a customer of the rental car industry, and once you sat next to someone who manages cars for an unrelated industry at a dinner, and are therefore qualified to know and represent the buying metrics for said rental car industry. Did you also once stay at a Holiday Inn Express?

Sorry if this sounds snarky, but you are really stretching. The notion that any of the major rental car companies (Enterprise, Avis, Hertz, Budget) pay no attention to customer preferences or market pressure is just silly. No business on earth functions this way. This is bourne out by the fact that their fleets are clearly made up of different segments. SUV/Crossovers/Sub Compacts/Full Size Sedans etc. If what you said is true, and the consumer nor the renter care anything about specific models, they would simply have fleets made up of the cheapest vehicles (sub-compacts). I'm assuming you see the folly in this, as its clearly not the case.

We have already had anecdotal evidence of someone claiming that rental Camaro's have been returned by customers due to visibility issues in this very thread. Does that claim sound far fetched? Someone renting a 6th gen and complaining about visibility? Tell me, if you were in charge of procurement for a rental company, wouldn't you be much less inclined to repurchase a vehicle that has had complaints, and has a history of returns by your customer base? This would in the very least, factor into your decision to purchase further units of that particular model. If the answer is yes, you just admitted that your previous claim is false:

If they can buy 100 Mustangs at $17,999 vs 100 Challengers at $17,998, they will buy the Challengers every time and twice on Sunday.."

Of course cost is a huge component, but its meaningless if that particular widget doesn't meet its core functional requirements or it does so poorly and you therefore must bear additional costs. If customers return to the lot and demand a replacement, you have not only just wasted the time of your staff, but you then need to calculate that you purchased two vehicles to satisfy that one customer in that particular transaction.

Can you share "the plan" with us? GM is one of the largest automakers on the planet. Given their financial performance, I doubt any shareholder is going to whine about inventory levels appearing high.

(Nice Strawman)

If you need me to explain that sitting on unsold inventory at rates over double the industry standard is a 'bad' thing, I don't know what to tell you.

You seem to conveniently bounce in and out of a macro/micro viewpoint in these discussions. Sometimes focusing on just Camaro metrics, then GM as a whole. Camaro is such a tiny percentile of GM, quoting stock values may as well be essentially irrelevant. Do you believe that GM only looks upon the performance of sales in total? No analysis or decisions regarding the performance of specific models?

[90503]

...So car renters prefer Mustang and Challenger over Camaro, but car buyers prefer Camaro over Mustang and Challenger....

Not sure what customer preferences the rental companies are using, but the obvious market pressure that influences them is price....and they aren't getting fleet/rental dump prices for Camaro, apparently....

Anecdotally, Mustang and Challenger carry more luggage and bulk than Camaro. No secret. That works for rentals, but not for retail customers.

Just sayin' if rental companies have a lock on the pulse and preferences of customers and market pressures, Camaro wouldn't be first in retail sales, either...

[rburke76]

Camaro is the best of the three (Camaro, challenger, mustang) out there! Great engine and transmission! Its 2017! You can get a brand new Camaro from the factory! They should be selling 100,000 a year! I don't think its price totally,Reasons that could help-1.Camaro could start by adding new colors: Aqua blue, gold, gun metal grey, green metallic, rosewood metallic, brown, orange, etc.. 2. they should start selling a "base V8" for 29,999$...you know, a auto or manual V8 stripped down for about 29,999$...3. More commercial's...People do buy what they "see"...Every day I see that Vin Diesel Challenger commercial...4. maybe 50,000 Camaro owners could make a road trip to the GM headquarters and surround the building. 5. Pray! I love the Camaro and yes maybe they are making more profit per vehicle...I just can't stand being in third place....Maybe having the Camaro as the main nascar car next year will help...I have a red Camaro 2017..most awesome vehicle I ever owned....

[UK Basketball Rocks]

I personally think the Camaro SS's, 1LE's and ZL1's are way overpriced and especially the 1LE's and SS's.

Chevy needs to sell a lower priced base model SS with the V8 the same way Ford did on the Fox Body Mustang back in the late 80's and early 90's. You could get a Mustang Coupe 5.0 with the GT rims and tires for $13k OTD and I know because I owned one, best bang for the buck that i ever had.

[crysalis_01]

So with all the talk of Mustang price being the main selling point to rental, I suppose the 2018's will see that come to an end. Seeing as the pricing parity has been closed. Of course that's assuming there is no price increase for the upcoming MCE 2019 Camaro.

2018 will be an interesting year to watch.

[90503]

Originally Posted by crysalis_01

So with all the talk of Mustang price being the main selling point to rental, I suppose the 2018's will see that come to an end. Seeing as the pricing parity has been closed. Of course that's assuming there is no price increase for the upcoming MCE 2019 Camaro.

2018 will be an interesting year to watch.

If Mustang is raising their prices closer to Camaro, (not sure that would change rental scenario...for all we know they could still be heavily discounted)....but for retail it should help Camaro, as the drum-beat has always been Camaro high pricing drives customers to Mustang and Challenger....

I don't necessarily agree with that argument, but it should be interesting to see how that theory pans out....

[camaro5]

Originally Posted by 90503

If Mustang is raising their prices closer to Camaro, (not sure that would change rental scenario...for all we know they could still be heavily discounted)....but for retail it should help Camaro, as the drum-beat has always been Camaro high pricing drives customers to Mustang and Challenger....

I don't necessarily agree with that argument, but it should be interesting to see how that theory pans out....

I agree. They'll still be dumping mustangs wholesale to rental car lots.

Will be a level playing field with a de-contented 1SS, and mustang gt $3k increase w/ perf. pack.