Industrywide reductions in residual values, coupled with Oldsmobile's pending demise, have driven the division's off-lease residual values lower than the industry average, and the decline is occurring at a faster pace.
Oldsmobile has settled into a "glide path" to manage itself out of business, said John Gatt, brand manager for the Oldsmobile Aurora and Bravada.
"Without a doubt, if we really turned on the (lease support) spigot we could make up some sales, but our strategy is to keep pace with our sister divisions. We're running where we expected to be, and we're beating our forecast."
Falling residuals have made new Oldsmobiles less attractive to lease consumers because lower residual values mean higher monthly lease payments.
Last fall, Automotive Lease Guide pegged the average 36-month residual on a 2002 Oldsmobile nine percentage points below the 36-month average residual of all 2002 vehicles. In the company's May/June guide, Oldsmobile's average residual slipped five points, compared with a three-point industry decline.
Automotive Lease Guide, of Santa Barbara, Calif., is a widely used benchmark for predicting residual values on leases.
Oldsmobile is still heavily supporting lease deals on its redesigned Bravada but has cut back on most other vehicles. It is promoting cash rebates, cut-rate financing and its five-year/60,000-mile warranty instead.