Commentary: It Ain't All Rosy, Folks!

The news lately has been disheartening for the automotive industry. Let alone covering it. 

There had been plant closures at Volkswagen, following with strike actions at their German plants. Inventories at American dealerships reaching over a year – even with brand new 2023 models in stock. Debates on whether electric vehicles have a place in the market. Let alone, EV acceptance compared to sales. The threat of tariffs on anything coming into the USA. Corporate decisions dismantling policies on ensuring equity and inclusion for its employees, as well as supporting parts of its customer base. 

However, two news stories involving key manufacturers had the most impact upon me. I better sort them out. 

Carlos Tavares spearheaded a grand idea to create one of the largest automotive firms in the world through a massive merger. He aligned his Groupe PSA with Fiat Chrysler Automobiles to meld it into Stellantis.

There are opinions on various sides that will say that it was a merger gone wrong. Or, has it?

If one indicator on how things have transpired, one should take in consideration Taveres’ resignation as CEO of the French-Italian-German-American conglomerate. 

Sales are down worldwide. North American inventories were getting out of hand. There were threats to cancel brands if they did not perform accordingly. 

Just when we were assured some years ago that all of the jobs will be retained across the entire company worldwide, there’s really no guarantee of that anymore. Or, that all of the facilities will keep running. In particular, ones in Europe and in the Americas. 

As we look into 2025, there is concern that Stellantis might have to undergo some radical changes. Some of which will be escalated from previous deadlines, such as the elimination of brands that are not doing well financially and sales-wise. 

Then, there’s several news reporting that project the demise of Nissan Motor Corporation within “12-to-14 months.” This was because they presented a 90-percent drop in profits. Enough so to have Mitsubishi buy back Nissan’s stock in their company. 

Recently, it’s been reported that Nissan will have to cut 9,000 jobs and 20-percent of their global production. All due to model year transitions to replace aging models and the lack of hybrid driveline options in their lineup. 

Granted, they had a hybrid driveline available until a few years ago. Plus, their partners in the Renault Nissan Mitsubishi alliance had hybrid and PHEV solutions ready to go into Nissan products. Would they have anything to reverse the extreme drop in profits? We may never know. 

However, there is a train of thought that the onslaught of new Nissan products for 2025 we’re seeing now is simply “too late” to save the company. Product is just one piece of the puzzle. There are a lot more components to tackle while averting the eventual soothsaying demise as stated in the media. 

All of the above made me wonder: “What is really going on with the automotive industry?” Is there an impending economic situation that will occur in 2025? Yes, the COVID-19 Pandemic did a number on the global economy, yet there were initial signs of recovery. Apparently, that is not the case. 

Automobile prices have risen to beyond what many people can really afford. That holds true with most consumer goods since 2019. That is perhaps one reason why there are huge inventories dating back a model year (or so) at dealerships across the country. 

If you ask any manufacturer their biggest challenge globally – it is China. Non-Chinese brands are faltering in the world’s largest automobile market, because the local industry has propped up a slew of lower priced electric vehicles that have taken the world by storm. Not just electric vehicles, but every kind of vehicle. 

Consumers outside of the USA and Canada are falling head over heels for the likes of BYD, MG, GWM, Chery, and the “lower brands” at Geely (side note: they also own Volvo and Polestar). The prices undercut those of other global vehicles. 

There was once upon a time – 1986, to be exact – when consumers swamped Hyundai dealerships in the USA because their Excel undercut the pieces of Toyota Corollas, Nissan Sentras and Honda Civics. We have seen the automotive industry in the republic of Korea fall on the sword, come back from the brink, and become a household name worldwide. 

The onslaught of Chinese automobiles created the conditions that have been discussed above. Plus, a few bits of “fake news," as well as other summary automotive industry subject matter. I shall refrain from calling that bullcrap out (yep, that’s a Coach Prime-ism I used instead of what I really wanted to say in this article). 

The fact is that we’re not entirely doomed. Well, hopefully, we’re not doomed. There will be some shifts and pivots we’ll have to manage as the new year is well under way. However, it is safe to say that things are not looking good for some of the automotive industry right now. 

Sorry, folks, but it ain't all rosy news.

Cover photo by Victory & Reseda