Dang, it looks like everyone will have to dream up a new way to insult the four-door Cobalt. GM's Bob Lutz has announced that sales to fleet companies will be curtailed to the tune of 100,000 vehicles this year. The reduction is part of an ongoing effort to boost the resale value of General Motors cars. Reducing sales to fleet customers opens the door for some other automaker to deal with the stigma and doesn't ding the bottom line as much as it would seem.
Low-margin sales to fleet customers are less helpful to automakers than retail sales, and the perception that comes along with being a fleet powerhouse dings the perception further.
Lutz doesn't sound overly concerned with short-term hits in the bottom line, preferring to take the uncommon long view and even admitting that there will be bloodletting before GM is fully realizing its potential. He's been refreshingly candid about making the product good enough that it requires no excuses or incentives to sell, and changing the sales mentality at GM from one of panic to true competition for the foreign makers that have cleaned the domestic industry's clock. Product is no longer the hurdle for GM to clear, there's lots of great stuff for 2007, and we look forward to the day when people strike up excited conversations about domestic product with us.
[Source: Automotive News sub. req'd]
Low-margin sales to fleet customers are less helpful to automakers than retail sales, and the perception that comes along with being a fleet powerhouse dings the perception further.
Lutz doesn't sound overly concerned with short-term hits in the bottom line, preferring to take the uncommon long view and even admitting that there will be bloodletting before GM is fully realizing its potential. He's been refreshingly candid about making the product good enough that it requires no excuses or incentives to sell, and changing the sales mentality at GM from one of panic to true competition for the foreign makers that have cleaned the domestic industry's clock. Product is no longer the hurdle for GM to clear, there's lots of great stuff for 2007, and we look forward to the day when people strike up excited conversations about domestic product with us.
[Source: Automotive News sub. req'd]
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