GM lifts sales to business buyers

DETROIT -- Fiat Chrysler Automobiles may own the industry's most noteworthy sales streak with 71 straight months of U.S. gains. But General Motors has put together a respectable string of its own: 28 consecutive months of growth in commercial vehicle sales to companies.

As GM pulls back from less-profitable sales to rental agencies, the company has channeled much of those resources into the more-lucrative business of selling pickups, vans and Chevrolet Malibus and Equinoxes to contractors, landscapers and florists. The result has been a sizable gain on its biggest commercial-fleet rival, Ford Motor Co., still by far the industry's commercial-sales leader.

Commercial sales to businesses tend to be the most profitable of the three sectors that make up the fleet market, which also includes sales to rental agencies and government buyers. GM executives in recent years have committed to expanding the commercial and government segments while reducing the company's reliance on rental, which can harm resale values and brand image when done in heavy doses.

GM's commercial sales last year totaled 213,358 vehicles, up 38 percent from 2013, according to estimates from Automotive Fleet, a trade magazine published by Bobit Business Media. That compares with FCA's 18 percent gain over that period (to 72,705) and a 3 percent dip for Ford (to 308,916).

GM's surge marks a strong comeback from its 2009 bankruptcy, when some commercial buyers bolted, spooked by the prospect of the company going under.

"A lot of customers weren't sure if we were going to be around," Ed Peper, GM's vice president of fleet and commercial sales, said in an interview last month.

Peper, a GM sales veteran who ran Chevy from 2005 to 2009, has led GM's fleet business since early 2012. He points to several factors contributing to the recent success:

• GM's revamped truck lineup, including the redesigned Chevy Silverado and GMC Sierra pickups launched in mid-2013. GM touts differentiating features such as the 4G LTE high-speed Internet service through OnStar for convenience on job sites, for example. Sales of the midsize Chevy Colorado and GMC Canyon pickups, too, have been hot since their 2014 introduction, Peper said.
• New and more-flexible offerings for fleet buyers. For example, GM now offers "box delete" versions of its midsize, light-duty and heavy-duty pickups, eliminating the box, rear bumper and spare tire assembly to let buyers customize their rigs. GM this spring will launch a product called Commercial Link that will enable fleet managers to track their drivers' location, fuel use, average speed and other information.
• A more tailored sales approach that emphasizes convenience. In 2013, GM implemented a new designation for dealers that pays them bonuses for giving commercial buyers special treatment, such as extended service hours and better availability of loaners. More than 650 of GM's roughly 4,200 dealerships are enrolled, up from around 430 that had participated in a previous program.

"We have a much keener focus on selling value," Peper said.

Willie Nelson, fleet manager at Gunn Chevrolet near San Antonio, says those perks have made it easier to win commercial business. Gunn delivered more than 650 vehicles to commercial buyers last year.

"Our conversations with customers are no longer just about the vehicles," says Nelson. "

Instead, it's about the preferential treatment they'll have in service."

Despite GM's recent gains, it could be tough to make further inroads on Ford, which is likely to redouble its efforts to sell F-150s to commercial customers after several months of production constraints last year amid the launch of its redesigned 2015 truck. And Nelson notes that GM still lacks Ford's broad portfolio of commercial trucks, which can dissuade customers who want one-stop shopping.

Peper's team is working to fix that with the planned addition of a several medium-duty models this year through a partnership with Isuzu Motors.

"Once we get back to playing with a full deck," Nelson says, "that should lead to residual sales and us picking up even more customers."