Ford turns 'dirty' business into a profit driver. GM and Stellantis are taking notice

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Ford has turned its fleet business into an earnings powerhouse. It's something General Motors and Chrysler parent Stellantis have quickly taken notice of.

Fleet, a once "dirty" word, and business, in the automotive industry has turned into a multibillion-dollar battleground for U.S. automakers, led by Ford Motor.

"There's much more of an emphasis now on profitability and how fleet can help that," said Mark Hazel, S&P Global Mobility associate director of commercial vehicle reporting. " are looking at how they strategically go about this. It's been a very targeted approach with how they deal with fleets." "Breaking apart the fleet channel, we see that Commercial sales have been the weakest. And zooming in further, there are just two that appear especially challenged: STLA and, to a lesser extent, GM," Wolfe Research said in an investor note Wednesday.While fleet sales data isn't as available as retail, Wolfe Research estimates Ford is by far the leader in such earnings at a forecast of $9.5 billion this year. That compares with North American operations at GM at $5.

Ford claims to lead sales of commercial vehicles, categorized as Class 1-7 trucks and vans, with a roughly 43% share of U.S. registrations through May of this year. That's up 2.3 percentage points compared with a year earlier, the company said., which are part of its F-Series truck lineup with the Ford F-150, and range from large pickups to commercial trucks and chassis cabs.

"Ford Pro is core to Ford, and there is potential upside on volumes as well as in software and service," BofA's John Murphy said Thursday in an investor note. "On software, Ford Pro accounts for ~80% of Ford's software subscriptions with an attach rate of only 12%, which is projected to grow to 35%+ over the next few years.

GM isn't sitting idle either. It has revamped its fleet and commercial business. It launched "GM Envolve" last year, its overhauled fleet and commercial business focused on fleet sales, digital telematics and logistics for commercial customers.

 

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