Vauxhall has reduced the number of rental companies it supplies from 10 to just four after another review of the volume of cars it sells into that sector of the market.

Although the manufacturer will not disclose figures, it says it will halve the number of vehicles going into rental this year compared to 2008.

The cut follows a 25% reduction on rental volumes two years ago.

Vauxhall is also unwilling to reveal which rental companies have retained their relationship, although Hertz, Avis, Europcar said they are still part of the carmaker’s plans for this year.

According to Bill Parfitt, Vauxhall managing director, the decision to cut volumes was taken for two reasons: the fall in the value of sterling against the euro which has hit profits; and the big hit suffered by residual values last year.

“We have restructured to reduce the number of used Vauxhalls in the market and we have seen our residuals increase each month this year,” said Parfitt.

“Reducing our rental partners from 10 to four is a deliberate policy so we can better manage that business.”

He believes that rental companies will be forced to extend their replacement cycles and added:

“The rental model will have to take account of the fact that everyone has to make money out of rental.”

Vauxhall has also strengthened the corporate team with the appointment of Robert MacLachlan, which has seen sales to large fleets of 250-plus vehicles rise by 20% this year.

While he is keen to take business from each part of the fleet sector, Parfitt believes contract hire offers a real growth opportunity.

“We have a very good relationship with some contract hire companies but not with others.

"So our focus is having a uniform performance in the industry,” he said.

Despite the ongoing review of Saab’s future, Parfitt is confident the GM UK Fleet multi-brand strategy will continue.

While Vauxhall has dominated sales under the umbrella which links together Vauxhall cars and vans, Saab, Chevrolet, Cadillac and Hummer, Maurice Howkins, Vauxhall fleet sales director, said Chevrolet was starting to pick up business.

“The awareness of Chevrolet is good and the products are improving,” he said.

“In today’s economic climate, drivers are happy to take a reliable, cheaper car.”