Automakers:  Who's hurting and who isn't.

"Manwich - now Keto-Friendly" (manwich) 04/04/2016 at 19:55 • Filed to: None

1

19

I’m getting tired of constantly reading about how FCA is “in trouble” and how companies like BMW and Mercedes are “great”

Well here’s a dose of reality:

!!! UNKNOWN CONTENT TYPE !!!

In reality, FCA is doing fairly well so far this year... up 9% YTD... which is better growth than ALL the other large automotive groups.

Yeah, they’re hurting on the smaller car front. But they’re selling many other things that earn them a lot of money.

Yeah yeah... Sergio is looking for a merger. But I attribute that more to him looking for a Golden Parachute than the company actually being in trouble. He also knows he has to develop more EVs, hybrids and better small cars... but doesn’t want to spend the money.

But that’s not the same thing as FCA being in trouble.

Anyway... based on what I see, I’d say that VW (with the diesel scandal and other issues), BMW (especially the Mini brand) and Mercedes (with Smart) are in far greater trouble than FCA. Mazda is hurting too. Aside from the CX-3 and the MX-5, everything is down for them.

Mitsubishi is still in a sad state... The Mirage is now outselling the Lancer. That might sound good on the surface, but I doubt Mitsu makes more money selling a Mirage instead of a Lancer. And they sold ONE i-MIEV. ONE. If it’s one vehicle that is pathetically uncompetitive, it’s the MIEV. Even with it’s relatively low $23,000 base price, with only 62 miles of range (EPA rated), it’s still way too much money. You’re better off with a used Nissan Leaf... which also isn’t selling all that well.

Once the Chevy Bolt and the Tesla Model 3 go on sale, unless they get a big update, cars like the Leaf and MiEV are gonna get killed in the market.

Apparently a new Leaf is coming out in 2017 and a bigger battery is available for 2016.

Toyota Prius sales are also taking a hit... but paradoxically, Toyota Tundra sales are down too.

And another odd thing... the Scion brand unit sales are up over 50% mainly due to the Scion iA (Mazda 2 clone) and the iM(Matrix in a Scion costume). Not bad for a brand that has been given the ax.

Oh and they sold 97 Mirais!!! The hydrogen car has arrived!!! I’m looking forward to how it does in the real world. I’m anticipating it will fall flat and will be a failure in the long run. But still... it’s one hell of a technical achievement. Though if Toyota gave me one for free, it would still be a glorified paperweight to me as I have nowhere nearby to refuel it.

And of course Tesla is up big time... for a total of 9300 units YTD. And that was aided by them being able to ship 1800 Model X units last month. 1800 high-priced Signature series Model X units... selling for $132K to $144K... looking forward to the next quarterly financial report.

Given I own some TSLA shares, I’m pleased that the Model X is finally ramping up... along with the Model 3 shaping up to be an instant hit...

Sweet Trav > Manwich - now Keto-Friendly 04/04/2016 at 19:58

1

Chrysler is in trouble long term. Are they making money right now? Yes. Do they have a long term plan? Not at all.

yamahog > Sweet Trav 04/04/2016 at 20:03

1

Exclusive footage from Auburn Hills:

lone_liberal > Manwich - now Keto-Friendly 04/04/2016 at 20:08

3

Like Travis said, their problem is not today it’s down the road. They have aging platforms that they don’t have the money to replace.

LongbowMkII > Manwich - now Keto-Friendly 04/04/2016 at 20:21

0

All of their most profitable brands are ready to be sold off. ram, jeep, Ferrari

mazda616 > Manwich - now Keto-Friendly 04/04/2016 at 20:21

1

I worry about Mazda because I don’t fancy having two orphaned cars in my household.

slipperysallylikespenguins > LongbowMkII 04/04/2016 at 20:24

0

Jeep is probably one of the most sellable car brands in the world right now. Companies, even some non automotive ones, would be lined up to buy it.

LongbowMkII > mazda616 04/04/2016 at 20:29

0

I worry about Mazda also. Someone would partner with them... maybe everyone will since the Miata and 2 are already shared with different companies. Maybe Sell the CX-9 platform to GM to replace their aging 3row CUVs?

ranwhenparked > Manwich - now Keto-Friendly 04/04/2016 at 20:35

2

FCA is hurting. Yes, their sales are up (in North America, nowhere else though, just North America), but they have a massive debt problem and they aren’t earning enough money to both pay down their debt and invest in new platforms, while still generating reasonable returns for stockholders. Their product line is aging, and even their newest products have been spun off of old architectures. They are struggling in Europe and Latin America and are almost nonexistent in China, lack really any hybrid or electric technology, and are totally dependent on trucks and SUVs in one solitary market for virtually all of their global earnings. Their margins are also razor thin and they are suffering from overcapacity in Europe and several of their North American plants are falling in productivity.

This company one US recession away from collapsing again, failing that, if they don’t find a way pay for the rejuvenation of their non-Ram/non-Jeep products soon, they will just kind of gradually whither away, like American Motors in the ‘70s.

Of the companies selling in the US, most are doing pretty well, but I would put Fiat Chrysler, Mitsubishi, and Volkswagen in the “warning” category, and Tesla and Mazda aren’t totally out of danger, either.

mazda616 > LongbowMkII 04/04/2016 at 20:49

0

The company to partner with them, to me anyway, is almost definitely Toyota. The 2 is already sold as a Scion. There is a Japanese-market only hybrid Mazda3 that uses Prius hybrid tech. I'm hoping for a hefty investment from Toyota.

iaintafraidofnoghost > slipperysallylikespenguins 04/04/2016 at 20:59

2

My worst nightmare is a Chinese company buying them.

Dwhite - Powered by Caffeine, Daft Punk, and Corgis > yamahog 04/04/2016 at 21:11

1

I imagine that it more like this.

yamahog > Dwhite - Powered by Caffeine, Daft Punk, and Corgis 04/04/2016 at 21:39

1

Both are accurate: Yours is management and mine is everyone else :P

gmporschenut also a fan of hondas > Sweet Trav 04/04/2016 at 23:02

2

“My end is doing just fine”

Cé hé sin > iaintafraidofnoghost 04/05/2016 at 04:41

0

Why? Hasn’t done Volvo any harm.

Manwich - now Keto-Friendly > iaintafraidofnoghost 04/05/2016 at 09:35

0

Yeah... better to let the Russians (AvtoVAZ) buy them... LOL

Just imagine... the same company that makes Ladas also owning Jeep...

Manwich - now Keto-Friendly > ranwhenparked 04/05/2016 at 10:06

0

Yes... many of their products are well aged. But key products that make them lots of money are getting important updates... like the RAM products, the Jeeps and the Minivans. Also an upudated RWD architecture should start appearing in 2019:

http://www.allpar.com/model/upcoming…

And they have the Chrysler 100 coming soon. And the Dodge Journey will turn into a Chrysler once it’s updated in a couple of years.

I think they do have enough money to pay down debt AND invest in platforms... The financial statements from the past 4 quarters suggests to me they can carry on, doing much of what they want to do (but not everything... but still have enough resources to do something like a hybrid minivan) and have the debt paid down in 3 years. Over the past 4 quarters, they paid down something like $12 billion in debt. And if my memory serves me, they have $28 billion of debt left as of the end of last year. I wouldn’t be surprised if they’ll be able to knock the debt down by another $5 billion for Q1 2016.

BUT they just can’t do everything. Right now it seems they have their development money invested in the stuff that makes them the most money... which is to say, they DON’T have any plan for a replacement for the 200/Dart, a small CUV for the Chrysler brand or a pure BEV platform.

But the solution is simple... partner up with either Mazda, Mitsubishi or someone else. Mitsubishi would be the most logical choice because the Lancer is also in dire need of an update and the MiEV needs a complete rethink/rebranding/replacement. AND they have the same problem of limited resources. They probably would have already done a joint Mitsubishi-Hyundai-Chrysler car if Mercedes hadn’t completely screwed up the relationship back in the 2000s.

Someone high up at FCA needs to have a “making amends” conversation with the top level people at Mitsubishi Motors.

And for a small Chrysler CUV? They could make a version of the Jeep Renegade.

The way FCA is today makes me think of how Chrysler was back around 1990-1991 when they were digesting the AMC purchase... and the LH cars were labelled as the “Last Hope” cars...

But the way I see it, the Chrysler of 1990 was much weaker than FCA of today.

ranwhenparked > Manwich - now Keto-Friendly 04/05/2016 at 11:25

1

Agreed, product sharing alliances are the obvious way forward to solve most of their problems, but Marchionne seems hell bent on a full blown merger at any cost. Mainly, he sees combining with someone else as a cure-all for their China, Europe, and balance sheet problems, and likely a source of some big golden parachute payoff as well.

I think the reasoning is flawed and FCA can survive fine independently as long as they find a good partner, but that’s where his head is.

I don’t think Mitsubishi is that partner anymore though. They’re too weak to be able to really fund their fair share of development costs (and FCA doesn’t want to shoulder much of them, either) and they closed their sole North American plant, so FCA would be stuck with all production.

Mazda is a solid choice, though. They’re much stronger than Mitsubishi and are going to continue in the compact and mid size segments with or without a partner, and they have product ready to rebadge immediately. Also, they have a low cost plant of their own in Mexico and their existing deal with Toyota isn’t likely to continue beyond the current product cycle, so they could be looking for someone new soon.

iaintafraidofnoghost > Cé hé sin 04/05/2016 at 18:20

0

They aren’t running most the production on most their vehicles. Also, China owns enough U.S. companies. It’d be nice to keep something that literally symbolizes the U.S. in the U.S.

iaintafraidofnoghost > Manwich - now Keto-Friendly 04/05/2016 at 18:21

1

Ha, no Russkies have the coin or buying power to buy an American company. They are set to implode any time now.