Economic news

U.S. car sales tumble as manufacturers reduce sales of rental cars

American carmakers stated at the week’s start that they went on with the reduction of low-margin sales to rental fleets, in view of the general decline in car light truck sales during nearly half a year.

Annual number of U.S. cars and light truck sales went down to 16.73 mln items, compared to 17.8 mln items a year before, as per Autodata Corp.

The Detroit Three manufacturers’ shares were sold by investors yesterday. GM lost around 3.5%, while Ford dipped 2.5%. Such leading carmakers as Nissan, Hyundai, and the mentioned three – GM, Ford and Fiat Chrysler, stated they massively cut back on rental car sales last month, and they see it as putting revenue over sales numbers.

Car manufacturers have resorted to low-margin sales to fleets in order to prevent factories from closing. Now thanks to flexible employment agreements, the Big Three car producers have revised their policy. They said that they are idling factories faster to decrease supply, and setting bigger price tags. Fiat Chrysler no more producers some of the models designed for rental fleets.

Meanwhile American rental car companies such as Hertz Corporation or Avis Budget Group are shaking up own fleets due to the downward trend in rental cars resell, and encroachment of taxi services like Uber on them.


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