General Motors’ VP on Its Deliberate Drop in US Sales

General Motors’ VP on Its Deliberate Drop in US Sales
The General Motors world headquarters building in Detroit on Sept. 17. Bill Pugliano/Getty Images
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DETROIT—General Motors has taken a beating in the headlines this year as falling U.S. sales have cost it nearly a full point of market share.

Kurt McNeil, U.S. vice president of sales, says GM’s deliberate move to cut low-profit sales to rental car companies and focus on more lucrative retail sales to individual customers is behind the drop. But the auto industry’s focus on top-line sales numbers has made GM look bad compared with competitors.

McNeil discussed GM’s strategy in a recent interview with The Associated Press.

Q: GM’s market share has fallen to 16.8 percent from 17.6 percent a year ago, and sales are down 4.2 percent. Many people are wondering what’s going on?

A: We took out about 90,000 units of rental year-to-date. We’re down about 34 percent. That’s been a conscious strategy that started in the latter half of last year when we took out 50,000 units. It’s the least profitable piece of the business, and those vehicles come back in the market and they undermine your new-car values. We’re methodically trying to improve the residual (trade-in) value of our products. It’s somewhat thankless because the industry reports total sales. We know that, but at the same time, it’s the right thing to do, and we’re committed to the strategy.

Kurt McNeil, U.S. vice president of sales, at the General Motors World Headquarters in Detroit. (Steve Fecht/General Motors Company via AP)
Kurt McNeil, U.S. vice president of sales, at the General Motors World Headquarters in Detroit. Steve Fecht/General Motors Company via AP