GM's headquarters in Detroit. Image source: General Motors.

At first glance General Motors' (NYSE:GM) July sales figures appear slightly worse than the industry average. But much of that is due to GM's consistent efforts to reduce less-profitable daily rental fleet sales, which are down significantly from last year -- more on that in a second. GM's total sales in the U.S. market were down 1.9% last month to 267,258 vehicles, but they were healthier than they appear when looking at retail sales. Let's look at three takeaways as they relate to fleet sales, retail market share, and incentives to average transaction prices.

Let's talk fleet sales

Fleet sales, which have often been synonymous with low profitability, have been generating fewer and fewer of GM's total sales throughout 2016 and accounted for only 11.6% of its total sales last month. That's quite a bit less than GM's year-to-date percentage of 19.5% and far under rival Ford's 26% during July.

More specifically, GM's less-profitable daily rental deliveries were down more than 10,000 units last month alone, a 42% decline. That's not a one-hit wonder, either, as GM's daily rental deliveries are down 38% year to date, compared with the prior year. Such a significant cut of less-desirable fleet sales has taken a hit on GM's total sales figures and market share -- but GM's retail share remains strong.

Let's talk retail market share

GM's retail sales were up 5% in July to 236,235 units, compared with the prior year. That 5% gain was driven by gains across all four of GM's brands, which collectively posted their best July retail sales result since 2007. Looking at year-to-date retail sales, Chevrolet is up 3% and remains the fastest-growing full-line brand in the industry.

Furthermore, based on GM's initial estimates, its retail market share rose 1 percentage point in July to 17.9%. That marks the Detroit automaker's highest monthly retail market share since December 2011. GM has also gained retail market share in 14 of the past 15 months.

"Our retail-focused plan is working, and as availability of our new cars, trucks, and crossovers continues to grow, we expect to keep our retail sales momentum going and our strong margins intact," said Kurt McNeil, U.S. vice president of sales operations, in a press release. "We are growing our retail business while keeping inventories lean [and] incentive spend disciplined, and growing our transaction prices faster than the industry average."

Let's talk money

At a time when sales of more-profitable trucks and SUVs are all the rage, and while GM lowers its fleet sales, it spells better margins as long as incentives are held in check. GM's average transaction prices, which are calculated as retail transaction prices after sales incentives, were $34,887 during July. That was more than $4,100 higher than the industry average and up $1,100 over GM's level a year ago.

GM's incentive spending bounced higher last month, thanks to its eight-day sale in early July in an attempt to sell down some 2016 model-year vehicles. However, GM believes its spending will end up in line with competitors' for the month. GM's incentive spending through July 24 was 14.2% of transaction prices, which is higher than its 2016 average of 11.4%.

In all, GM seems to be doing all the right things at the moment. Its decisions to reduce fleet sales and focus on retail share while enjoying a surge in SUV and truck sales have resulted in a strong second quarter when other competitors struggled, but it will be very interesting to see if the automaker can keep building on its retail share momentum at a time when sales in the U.S. are peaking and incentive competition seems to be heating up.

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