DETROIT -- General Motors' fleet sales for 2006 in the United States will be down by 60,000 to 70,000 units compared with last year, says a GM executive.
The automaker is also getting better pricing on units sold to fleets this year and is optimistic about the direction of retail sales.
GM's fleet sales are in "the mid-20" percent range as a portion of total sales through June, Mark LaNeve, GM's vice president of vehicle sales, service and marketing, said in an interview with Automotive News.
GM's fleet sales fell by about 50,000 units in 2005 compared with 2004, LaNeve says. He predicts they will drop by 60,000 to 70,000 this year. GM intends to cut fleet sales by 5 to 10 percent annually going forward, he adds. A GM spokesman said fleets represented 25.9 percent of 2005 U.S. sales.
"I'm not locked into a share target in terms of fleet as a percent of our business," LaNeve says. "But we're going to take it down."
In 2005, GM sold 1.14 million units into fleets, including Saab, Morgan Stanley's auto analyst, Jonathan Steinmetz, says in research notes. A 60,000- to 70,000-unit decrease would mean a drop of 5.3 to 6.1 percent.
GM's first-quarter fleet-to-retail mix was 30 percent, up from 26.9 percent during the same period a year ago, Steinmetz says.
LaNeve says GM's profits from fleets are the best they have been in two years. That's because products are garnering better prices under GM's pricing strategy, which lowers sticker prices in hopes of cutting incentives.
"We really believe the strategy has started to take hold in terms of lower incentives," LaNeve said. "Sales are up from a standpoint of share and running rate over the past three quarters."
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