GM and Chrysler emerged stronger than expected from their respective bankruptcy filings, but a new report reveals what is actually behind the sales surge.
Just as the steroids era is coming to a close in baseball, it looks as though the automotive industry has found its own variety of HGH - fleet sales. While new car sales have been up pretty much across the board this year, a new report indicates that the industry's positive growth is a direct result of increased fleet sales.
General Motors and Chrysler have been touting stronger sales numbers since emerging from bankruptcy last summer, but several new documents uncovered by Automotive News prove those sales figures were artificially inflated by sales to daily rental fleets.
Through July of this year, GM's overall sales were up 13 percent while Chrysler's sales increased by 11 percent. However, if you take away the automakers' sales to daily rental fleets, an entirely new picture comes into view.
According to the documents, GM has increased its fleet sales to 400,000 units this year - an increase of 53 percent - while Chrysler has more than doubled its fleet sales to 242,000 vehicles. If those sales are omitted from the yearly tallies, GM's overall sales are down about 1 percent while Chrysler's sales are actually down about 19 percent from its reported numbers.
And, despite successfully sidestepping bankruptcy, Ford is also guilty of higher fleet sales. Chrysler leads the charge with 39 percent of its total U.S. sales going to fleets, but Ford is close behind with 35 percent of its overall U.S. volume winding up in fleets. GM ranks third, with 31 percent of sales going to fleets.
"We all are -- every one of the Big 3, even the imports," Chrysler CEO Sergio Marchionne said last month. "As new models start launching, you'll start seeing an increasing share of retail."
However, Marchionne's statement isn't entirely correct as foreign automakers don't rely on fleet sales as heavily as the domestic automakers. Hyundai is the largest foreign seller to fleets, but just 16 percent of its total U.S. sales go to fleets. Nissan comes in at second with 15 percent, followed by Toyota (9 percent) and Honda (2 percent).
Fleet sales aren't necessarily a bad thing, but it looks as though the Big 3 automakers are guilty of using fleet sales to paint a much rosier picture of reality.
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