GM slashed July rental vehicle sales, boosted commercial fleet

General Motors Reports Weaker-Than-Expected July Sales as Auto Industry Stumbles

Ford said July sales fell 7.5 percent, but inventory fell to 77 days from 79 the previous month.

Investors sold shares in the Detroit Three automakers on Tuesday.

Automakers have used low-margin sales to rental fleets to avoid factory shutdowns.

Several major automakers, including GM, Ford, Fiat Chrysler Automobiles, Nissan Motor Co. and Hyundai Motor Co. said they sharply reduced rental vehicle sales in July, and they portrayed the decisions as putting profit ahead of sales volume. Ford's decline? 7.5 percent. With labor agreements being more flexible, the automakers in Detroit have shifted away from that.

Compared to this time last year, "we're starting off at higher incentive levels; we've got even more elevated inventory levels and even worse inventory-quality problems" heading into the end of the model year, he said.

Big rental auto businesses in the USA like Avis Budget and Hertz are also restructuring their own fleets as their values drop for the rental vehicles they resell, and as ride-hailing services like Uber take a bite of their business.

Dropping sales could leave the big three in Detroit with an excess of factories in North America, said an industry forecaster. Chevrolet was down 15.3 percent, Cadillac fell 21 percent, Buick fell 30.5 percent and GMC, which concentrates on trucks, fell 7.3 percent. The automaker had 104 days of supply at the end of July, down from 105 days at the end of June.

Sales of the Calumet Region-made Ford Explorer shot up by 12.9 percent in July with 18,763 of the sport utility vehicles sold across the country.

GM stock fell 2.9 percent amid news of the decline. The Dearborn, Mich. -based automaker's fleet sales dropped by 26.4 percent to 40,720 units partly because of a Transit recall delivery hold.

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