As Automotive News points out in its expose on better than expected volume and top line results at GM and Chrysler, "Reports of robust post-bankruptcy sales at General Motors Co. and Chrysler Group need an asterisk." The reason, based on internal documents obtained by the publication: digging behind the headlines indicates that retail sales, or those that actually matter and are indicative of a vibrant end consumer (with or without rebates), are actually down year to date: 1% at GM, and 19% at Chrysler. "Essentially, GM and Chrysler regained the fleet business they lost during their troubled 2009 trip through bankruptcy. Counting fleet of all types and retail sales, GM is up 13 percent this year, and Chrysler is up 11 percent. That's close to the industry's 15 percent gain." So basically if one were to strip away the rental companies, all of which themselves were on the verge of bankruptcy in early 2009, and have recently found themselves in a position of strength, courtesy of cheap floorplan financing and various cheap ABS conduits, the two bankrupt auto companies are doing worse off YTD than they did in 2009. If this is not indicative of the "strength" of the US consumer when it comes to medium-ticket purchases, little else is.
More from Automotive News:
Although he did not comment directly on Chrysler's fleet numbers, CEO Sergio Marchionne admitted recently that he is dependent on fleet sales.
"We all are -- every one of the Big 3, even the imports," he said July 30. "As new models start launching, you'll start seeing an increasing share of retail."
After stumbling badly in 2009, fleet sales soared to about 1.6 million units in the first seven months from fewer than 1 million a year earlier. Daily rental companies, contractors and other fleet operators that deferred vehicle purchases last year are more confident -- or are forced to replace worn-out vehicles.
GM sales Vice President Don Johnson said dealers are telling him that contractors are returning to showrooms.
Having shed Saab, Pontiac, Saturn and Hummer, GM's four surviving brands are up 18 percent retail through July, GM spokesman Tom Henderson said. Automotive News calculates GM's fleet sales rose 50 percent for its four brands this year.
Henderson did not dispute the numbers cited in this story but said that "it is invalid and misleading" to compare GM's current retail sales to a period when it had eight brands and that GM has "gained 1 point of retail market share."
Rebecca Lindland, head of North American auto research at IHS Automotive, said there is pent-up demand in fleet, but not necessarily any on the retail side. "Rental fleets are investing now because they bought very little last year and their vehicles are old," Lindland said.
Through July, GM and Chrysler are taking close to half the industry fleet surge. But others also are boosting fleet sales.
And for all those who expect the recent SAAR in the mid-11 million range to persist may be in for a rude awakening, if the struggling US consumer continues to revert to the new "frugal mean":
Manufacturers expect the pace of fleet sales to slow in the second half. Ford, Chrysler and GM say fleet will be a smaller part of their sales mix by year end. Pipas expects fleet volume to be about 30 percent of Ford's sales for the full year. Henderson said GM's full year fleet mix will be 25 to 26 percent, similar to 2009's 25 percent.