General Motors focusing on commercial sales for profits

General Motors focusing on commercial sales for profits


In the midst of lowering consumer demand, in order to sustain profit margins, General Motors Co. has been focusing on sales of U.S. commercial fleets, attacking to the lead of its rival Ford Motor Co.

To raise the demand of its light-duty vehicles including cars and trucks, a new medium-duty Silverados has been added by the GM to be utilized as utility bucket trucks, delivery trucks and tow trucks. Normally automakers roughly estimates an additional sale of up to six SUVs, passenger cars or pickup trucks that the corporate customer additionally buy with every medium duty truck they purchase.

Last week, schedule of GM for potential closure of five of its North American factories, highlighted the need for automakers to boost their sales in United States in order keep running the plants. GM’s closing plants also include two of the plants that are making the sedan which faced negative response by the American consumers. To the other end, shuffling of workers from slower to busier plants has been announced by the Ford.

On Monday for the last month, most of the major players of auto industry have reported lower sales in United States. But reportedly, in November, GM remained a bit successful to offset its decline of 1 percent in retail sales by elevating the commercial fleet sales 24.1 percent higher than the sales in the same month a year ago.

Last month a long term strategy of cutting down the sales of low-margin rental fleets and enhancing more profitable commercial sales was unveiled by the GM North America chief in an interview to Reuters.

According to industry data, this year rental sales shared 10 percent to the total sales of GM which was 15.8 percent in 2013, whereas commercial sales rose from 7.8 percent to 11 percent in the same period.

In a partnership with truck maker Navistar International Corp., production of medium-duty trucks by GM has been beginning this week.

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Javier Davis produces news on stocks, currencies, bonds, commodities, and real estate. His in-depth research covers most of the major financial markets in America, Europe, and Asia. His research is based on the interconnected relationships among economic and technical factors that drive valuations in the markets, with an emphasis on how to formulate investment strategies. From interest rates to inflation to economic growth and much more, the fundamental concepts presented on this website provide an essential foundation of knowledge for investors to profit in stocks, bonds, commodities, currencies, and real estate markets.