Fleet News

Managing residual values is key to return to profit

RESIDUAL values are playing an key role in Project Olympia, General Motors Europe's far-reaching plan to return to financial profitability.

Residual value improvement will help the firm meet the Olympia goals of increasing revenues and reducing costs.

Mike Burns, president of GM Europe, said the manufacturer had to improve its profitability and brand image through stronger management of its residual values.

He insisted that Vauxhall, Opel and Saab would carefully monitor the volumes of their sales into the daily rental sector, and manage the specification of these vehicles to ensure they have appeal to a used car audience.

Burns also said the GM brands would examine alternative remarketing channels so that management cars, for example, could be recycled as rental cars, or rental cars recycled as lease vehicles.

He said: 'At times we have not been as disciplined as we need to be to remarket cars. We have probably not paid as much attention on the residual value side of the business, and it's the same with Saab, so there is work to be done.

'There is now a group of people working on this, and we have taken the best people from marketing and GMAC to come up with new ideas.'

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