DETROIT -- For a long time, General Motors relied on rental sales to make its monthly totals look better. Now, it has a new problem: how to convince market watchers to pay more attention to its retail sales -- deliveries to individual customers -- than those monthly totals.
That's because GM is in the midst of a big cutback in sales to rental fleets, an effort executives say is aimed at improving the bottom line, even if it stunts revenue or market-share growth in the short term.
GM already was keeping a tighter lid on rental sales following its 2009 bankruptcy. But it has been making deeper cuts lately, reducing rentals by 11 percent last year, or nearly 50,000 vehicles. In January alone, its rental sales sank by 13,000 vehicles vs. a year earlier.
The company's rationale is that rental sales are low-margin and tend to harm residual values and brand image. The Chevy Impala, for instance, is still regarded by many consumers as the quintessential rental car, even after a 2013 redesign that drew raves from Consumer Reports and others.