GM intends to cut its fleet sales in an attempt to improve
profitability. This sheds a bit of light on some of the recently announced plant closures, such as the cutting of
a shift at GM’s Oshawa, Ontario, plant (a huge facility that builds GM’s midsize sedans). Whether the net outcome
of this will be increased per-vehicle profitability, I don’t know – GM has traditionally relied on big volumes to
keep down per-vehicle overhead costs, and even the recently-announced closures will not result in
immediate overhead cost cuts. As they say, however, a journey of a thousand miles begins with a
single step, and this is a significant step forward for the General.
Some numbers were presented in the article linked below that are interesting outside of the context of fleet
sales. GM’s average wholesale transaction is over $18,800. GM’s average fleet transaction is around $15,000, and
those sales make up about 25% of GM’s output. Toyota’s average transaction? $23,750. I don’t know that these are
meaningful when talking about fleet sales (the fact that fleet sales prices are significantly lower than GM’s average
transaction may just reflect that fact that not many rental agencies buy $35,000 pickups and SUVs), but by backing out
fleet sales, we can see that GM’s average non-fleet wholesale transaction is right around $20K – over 15%
lower than Toyota’s average wholesale price. Wow.