GM Says Greater Retail Volume Will Offset Fleet Sale Cuts

General Motors Co. tells Reuters the company’s share of the American car market will stabilize above 17% even after it reduces rental fleet sales by 80,000-90,000 units this year.

GM controlled 18% of the U.S. car and light truck market in January-February 2015. That share shrank to 17.3% in the same two months this year after the company trimmed its sales to daily rental companies by 49,000 units, says Alan Batey, president of GM North America.

But Batey figures an increase in more profitable retail sales should largely offset a decline in GM’s fleet volume from 449,000 units in 2014 to no more than 320,000 vehicles this year. He tells Reuters the company plans to shrink its rental fleet sales from about 20% in the past to 9%-12%.

Fleet sales bolster a carmaker’s market share. But the sales yield lower returns, and residual values for retail vehicles fall when fleets dump their used cars on the market.

Reuters says analysts have been surprised by how quickly GM has trimmed fleet sales. Some observers say GM is paring back now, when the U.S market is at a peak, to prepare for an expected market contraction in 2017 and beyond.