Some Of Your Favorite Brands Face The Chopping Block

Automakers from Porsche to Ford have posted disappointing sales figures for the second quarter of the year, and things aren’t going very well at Stellantis either. In fact, things are now so bad that CEO Carlos Tavares says he’s ready to put an end to brands that cost money to keep running. This marks a stark contrast from December 2022, when all 14 brands under the Stellantis umbrella were performing well, following the formation of the conglomerate in early 2021. After announcing weak margins and high inventory of slow-selling vehicles, the CEO did not mince his words, reports Reuters.

Which Brands Are At Risk?

It’s difficult to analyze which brands are most likely to be sold or liquidated because Stellantis does not release financial figures for its individual brands besides Maserati, but this had a multi-million dollar operating loss in the first half of the year. The Reuters report goes on to say that some analysts consider Maserati a potential candidate for sale, while brands with less esteem in the modern age like Lancia and DS could be scrapped. Exciting new reveals like the Ypsilon HF provide a glimmer of hope, but they are yet to prove their worth. However, American brands are also in trouble.

Ram and Jeep provide great margins, but they cannot do things alone, and they could be doing better. Culling the Cherokee nameplate hurt the latter, and the former has been a manufacturing headache. As reported by Automotive News, the mid-cycle facelift slowed production as tooling changed, contributing to an 18% drop in North American sales. This was also attributed to not having enough high-margin upper-range Ram 1500 trucks available while scores of unwanted entry-level trucks sat on dealer lots. Worse still, the direct run rate at some Stellantis plants “is not good,” meaning that too many cars get to the point of quality control only to be turned back for repairs; a low percentage of vehicles make it from the beginning to the end of the production line and can head straight to dealers, resulting in enormous recall campaigns.

Stellantis Is Not Alone

Tavares previously seemed confident of Alfa Romeo’s continued existence, but poor results across the board call into question the medium and long-term strategies of all automakers, including those outside the Stellantis family. Ford has been grappling with several quality recalls, and as a result, MarketWatch reports that unexpected warranty costs have led to the Blue Oval’s greatest stock price drop since the 2008 recession. Similarly, pricing incentives wiped out Nissan’s profits this quarter. The entire industry is facing a moment of difficulty, and it will be interesting to see what dead weight is cut as all automakers look to become more efficient.

Related

Stellantis Dealers Make Urgent Plea For Help

Sales numbers of Stellantis brands in the US are down, and dealers are seeking aid.

Sources:
Reuters
,
Automotive News
,
MarketWatch