GM Betting on Commercial Sales in Bid to Bruise Ford

With passenger cars deserting the ranks, the battle for sales and profit in Detroit will be waged almost solely with trucks. You’ve already seen what General Motors has in store for HD truck buyers, and Fiat Chrysler’s expected to reveal its own alternative to Ford’s Super Duty line before long.

However, as lucrative as half-tons and HDs are, GM’s looking forward to challenging Ford with its new, medium-duty Silverado line, revealed earlier this year. With this truck, The General hopes to turn medium-duty sales into commercial demand for lower-rung pickups and SUVs.

The more profitable side of fleet sales — commercial sales — is square in GM’s sights, Reuters reports. Last year, the automaker announced a plan to boost profitability by stemming the flow of vehicles, mainly cars, to rental fleets. Now, it’s stemming the flow of cars to retail buyers in order to turn out the lights in underperforming plants. That leaves higher-margin trucks to generate extra cash for the automaker.

In the commercial truck field, Ford is king, but GM’s making headway. The automaker recorded a 24 percent year-over-year rise in commercial sales in November, even as retail sales dropped 1 percent. (GM now keeps its full sales stats away from prying eyes, releasing the data only on a quarterly basis.)

At the same time, year-to-date rental sales have fallen to 10 percent of GM’s volume, down from 15.8 percent five years ago. Over that term, commercial sales rose from 7.8 percent of total volume to 11 percent.

This week, GM and partner Navistar International Corp. kick off production of the Silverado 4500, 5500, and 6500 with the hope of attracting orders from public works departments, utilities, and construction companies. The company hopes that, as seen with other medium-duty trucks, these sales translate into purchases of smaller GM vehicles. The industry average is about six light trucks and cars for the purchase of every medium-duty truck.

GM jettisoned its medium-duty truck line during the 2009 bankruptcy. Now, the line returns — with much more corporate branding than before, plus a direct lineage to the well-known Silverado line — just as the automaker dives deep into its streamlining efforts.

As for GM’s main competitor, Ford’s commercial fleet sales amounted to 12.4 percent of total volume in November, up 2.1 points over last November’s tally. Year to date, the Blue Oval’s commercial volume stands at 12.9 percent, up one point from last year. In contrast, rental sales of 7.5 percent last month represent a 2.9 percent drop over the same period last year.

[Images: General Motors]