Ford’s been hardest hit by the semiconductor shortage, but recent events show that no company can escape the impact.
Toyota shutdown its plant in Guangzhou, China last month due to a COVID outbreak.
Toyota announced temporarily shut downs of 27 out of 28 production lines at 14 plants around the world due to the problem. Volkswagen officials said they’re mulling ways to avoid a similar problem, saying production levels would fall, but no plant closures were announced. Unsurprisingly, Ford is closing plants this weekend due to the problem.
The Japanese automaker’s announcement came as a bit of a surprise because of its scale: 40% of all its global capacity will be down for parts of September. The company will lose about 360,000 vehicles due to the maneuver. It covers a variety of the maker’s portfolio: RAV4, Corolla, Camry, Prius and even the company’s luxury unit’s Lexus RX.
Not surprisingly, the world’s second-most valuable automaker saw its stock take a hit today, falling 4.7% on the news. Some of that drop comes because the company’s forecast for annual operating profit of $22.7 billion didn’t change, but it’s already lower than analysts are predicting.
Toyota’s Takaoka plant was partially shut down due the impact of an earthquake earlier this year.
Avoiding the problem
Toyota managed to steer clear of the issue because it had presciently stockpiled semiconductor chips, according to multiple media reports. The strategy came about as a response to the massive 2011 earthquake that hit Japan, forcing its shutdown for weeks.
Additionally, the Fukishima nuclear plant disaster cemented the need, in the eyes of Toyota’s top leaders, to ensure it had a healthy backstop of chips.
Several product lines will be affected by the automaker’s closures, including the Toyota Camry.
As a result, the automaker confirmed its goal of building 9.3 million vehicles globally for the fiscal year ending March 2022. It also still plans to sell 8.7 million of those vehicles. The total would make it the second biggest automaker behind Volkswagen.
Chips not the only issue
Semiconductors are problematic, but production of vehicles — as well as additional chips — is being hampered as the latest wave of COVID-19 hitting the company’s facilities and its suppliers in Southeast Asia very hard.
The issue caused Toyota to previously stop assembly lines at some Japanese factories between late July and early August, including its Tahara plant, due to a surge in infections in Vietnam which had constrained the supply of parts, according to Nikkei, the Japanese news service.
The company’s also been forced to deal with similar issues at a plant in Guangzhou, China, and three others in Thailand.
Toyota spruced up the Avalon with the Nightshade package for 2021. It’s ending production after the 2021 model year.
Everybody’s buying crossovers, sport-utilities and trucks these days, but officials within Toyota’s North American operations consistently maintain the company is happy to remain one of the top producers of sedans — but it’s cutting the Avalon from its line-up after the 2022 model year.
The move, first reported by Automotive News, was outlined in a letter to suppliers, and later confirmed by the automaker. The sedan is built at Toyota’s plant in Georgetown, Kentucky. It will leave the company with four sedans, one of which is the Mirai, the company’s fuel-cell model that sells in very low volume right now.
The Avalon is the Japanese brand’s largest offering in the segment. Refreshed in 2019 and due for an update next year, the fifth-generation model is selling well this year, up 36.6% through the first six months of the year. However, of the five sedans in the company’s line-up, it was the laggard, trailing Camry, Corolla and Prius.
In fact, the Prius sold 28,000 more units through June than the Avalon. However, it did outperform one four-door model: the aforementioned Mirai. However, the fuel-cell sedan — by percentages — smoked the Avalon, seeing a 664.1% jump in first-half sales.
The Avalon’s been the brand’s flagship model for 26 years.
We like sedans
Last week, Toyota’s U.S. sales chief Bob Carter reiterated the company’s commitment to the segment during an online meeting with reporters.
“As a company — both Toyota and Lexus — we sold nearly 70,000 sedans last month,” he said. “Compare that to the other companies out there, that’s a very dominant number. There are consumers out there, even at 20% of the industry we’re looking at 4, 4.25 million sales out there so there is a market.”
Carter conceded the profits may be lower on those vehicles, but “it is a profitable business for us.” However, it’s the large car segment that may be suffering the most in the sedan market, and the Avalon was also a laggard there too, outselling only the Nissan Maxima in the first half of the year. Plus, the top sellers in the very small segment are essentially muscle cars: the Dodge Charger and Chrysler 300C.
Tesla raised the price on its Model Y Long Range by $10,000 due, in part, to supplier issues.
As many automakers struggle to find semiconductor chips for their high tech vehicles, Tesla Inc. clearly has the issue taken care of as its second-quarter sales pass the 200,000-unit mark.
“In the second quarter, we produced and delivered over 200,000 vehicles,” the company said in a statement. “Our teams have done an outstanding job navigating through global supply chain and logistics challenges.”
For many car companies, the second quarter’s been difficult as it relates to keeping a steady supply of the chips. Tesla did have a short shutdown in February due to the problem, but since then has been churning out vehicles steadily, especially during the most recent quarter.
Tesla delivered more than 200,000 Model 3 and Model Ys during the quarter.
The company produced 204,081 Model 3 or Model Ys last quarter, a massive increased when compared with the year-ago period’s 75,946 vehicles. While pushing out its most popular vehicles — Model Y being the company’s biggest seller — it put the freshened 2021 Model S and Model X on the road during the quarter. It moved
Chip problems
The company did have a production hiccup in the first quarter of last year due to chip problems, but has since not had a problem. CEO Elon Musk said the semiconductor problem was causing some companies to behave impulsively.
“Our biggest challenge is supply chain, especially microcontroller chips. Never seen anything like it,” he tweeted June 2. “Fear of running out is causing every company to overorder — like the toilet paper shortage, but at epic scale. That said, it’s obv not a long-term issue.”
However, it doesn’t mean Tesla hasn’t been part of the sales rush. The Financial Times reported Tesla held discussions with chip makers to pay in advance, including offering deposits on high-volume orders. The company reportedly explored the idea of buying a plant to build its own chips.
Japanese automaker Toyota donated $55,000 to 37 GOP lawmakers who tried to decertify the results of the 2020 president election.
Toyota donated $55K to 37 Republican politicians who voted against certifying the 2020 election results.
Not only did the Japanese automaker support those politicians, but it was their top supporter — by a lot, according to investigative news website Axios, which pulled the data from a study by the Citizens for Responsibility and Ethics in Washington.
The company’s $55,000 was nearly than double amount of the next closest company, defense company Cubic Corp., which approached nearly $30K in donations. Toyota spread that money out to four times more Republican politicians than the next closest company. Toyota officials defended their donations.
“We do not believe it is appropriate to judge members of Congress solely based on their votes on the electoral certification,” Toyota officials said in a statement emailed to Axios.
“Based on our thorough review, we decided against giving to some members who, through their statements and actions, undermine the legitimacy of our elections and institutions.”
Influencing U.S. elections is a hot-button issue
For decades, what groups are funding politicians has been a contentious issue, but divisiveness surrounding the funding and influence has escalated in the last two presidential elections — Americans want to know who or what organizations are supporting their politicians and candidates.
In the wake of the attack on the U.S. Capitol Jan. 6 where protestors attempted to overturn the election while several Republicans inside the building attempted to forestall the inevitable, the divide has skyrocketed.
In all, 147 GOP members of the U.S. House of Representatives voted against certifying the November 2020 election results that saw former Vice President and Democratic challenger Joe Biden defeat Republican then-President Donald Trump.
Biden captured the popular vote with 81.3 million votes to Trump’s 74.2 million votes. The Electoral College vote was 306 to 232 in favor of Biden with 270 needed to win the presidency.
Since then, Trump and many others have contended the election was stolen. However, neither the Trump campaign nor individual supporters have been able to produce evidence of this, including two cases that went to the Supreme Court — both were shot down.
Where did Toyota’s money go?
The automaker spent big on politicians, including Andy Biggs, an Arizona Republican in the U.S. House. Biggs has been an ardent purveyor of what many call “The Big Lie,” the idea that Trump actually won the election.
Axios reported an organizer of the “Stop the Steal” rally that immediately preceded the storming of the Capitol Building Jan. 6, Biggs helped organize the event. Biggs denies the allegation.
The negative response on social media was swift and predictable with thousands expressing their disappointment and vowing to no longer buy a Toyota. Many tweets used plays on words to talk about the newest Camry S-Edition or some other version of it and typing “#toyota” into the search function automatically pulls up #ToyotaHatesDemocracy.
The new GT version of the Ford Mustang Mach-E will deliver substantially better range than the automaker originally estimated — the EPA rating the high-performance package at up to 270 miles per charge.
Ford’s Mustang Mach-E is one amongst a wave of new EV products coming to market.
That’s 20 miles more than what Ford initially claimed for the Mach-E GT. Meanwhile, the Mach-E GT Performance Edition will deliver 260 miles per charge, up from Ford’s original estimate of 235 miles.
“We already pushed the envelope by creating an electric vehicle with the pony badge, so it’s only natural that we push it even further,” said Darren Palmer, Ford’s global director for battery electric vehicles. “Mustang Mach-E GT Performance Edition not only gives you the added performance you expect from the GT name, but accentuates the thrill with the responsiveness of an all-electric powertrain.”
Charging up the market
The 2021 Mustang Mach-E GT gets 270 miles on a full charge, better than the previously expected 250 miles.
The electric “pony car” received something of a mixed response when Ford first unveiled it in November 2019 at the Los Angeles Auto Show. Some traditional fans lamented the idea of going electric, others disturbed to see an SUV wearing the familiar Mustang badge. But since the base and mid-range models went on sale late last year, the Mustang Mach-E has scored a solid hit. It has taken market share away from Tesla and helped power the 95% jump in overall U.S. sales of plug-based vehicles during the first four months of 2021.
Several factors have played out for Ford. Despite the concern of traditionalists, the crossover design comes at a time when SUVs have come to dominate the American market. And the initial models have come in with some of the best range numbers of any new battery-electric models. Depending upon the trim level and battery pack, the original front- and all-wheel drive Mach-E models delivered EPA numbers of 211 to 305 miles per charge.
The 2021 Ford Mustang Mach-E GT Performance Edition is expected to arrive sometime this fall.
The new GT models don’t quite match what the Tesla Model Y Performance model delivers, at 303 miles, but they remain contenders in the emerging electric muscle car segment.
The “standard” GT, meanwhile, punches out 480 horsepower and 600 pound-feet of torque. The Performance Edition bumps the torque number up to 634 lb-ft, enough, Ford says, to launch from 0 to 60 in 3.5 seconds. The special edition gets some additional help from stock Pirelli summer tires, the stock GT coming with all-season rubber.
Going head-to-head with Tesla
That’s about the same as the Tesla crossover with its performance package making 456 hp and 497 lb-ft of torque. Preliminary reviews have also faulted some aspects of the Tesla crossover’s handling. Initial reviews of the Mustang GT and GT Performance Edition are not yet available.
The GT will start at $61,000, the Performance Edition at $66,000. Those figures don’t factor in the current $7,500 in federal tax credits, nor do they include delivery fees and taxes.
With a new wave of electric vehicles moving closer to launch pads, Fisker announced it signed a binding agreement with Magna International Inc. to build a new EV for distribution in Europe and North America.
Henrik Fisker said his company and Magna aligned very quickly when it came to the Ocean.
Fisker and Magna, one of the world’s largest automotive suppliers, also confirmed production of the all-electric Fisker Ocean SUV is slated to begin Nov. 17, 2022, keeping it on the original timeline for deliveries in late 2022. Production is expected to jump to 50,000 units in 2023.
The new vehicle will be built at Magna’s facility in Graz, Austria. The factory has produced more than 3.7 million vehicles for several global automakers, such as BMW and Jeep, throughout the years. The finalized agreement gives the EV maker a partner with deep pockets as it launches its EV venture.
“From the start of this partnership, Fisker and Magna aligned very quickly on the importance of delivering a high-quality vehicle on time,” said Chairman and CEO Henrik Fisker.
“We continue to strengthen our partnership beyond platform development and manufacturing into areas such as the development of Fisker Intelligent (FI) Pilot. I am very confident Fisker and Magna will deliver an incredible product to our customers.”
Broad agreement critical
Magna’s facility in Graz, Austria already builds a variety of vehicles for established automakers.
This agreement runs through the expected lifecycle of the vehicle — 2029 — covering planned volumes, manufacturing costs, quality metrics as well as critical planning and launch phases. It also covers all facility investments, including body shop, a clear path to start-of-production in November 2022 and rapid ramp up to full run-rate production, the two companies said in a statement.
It also allows for future collaboration and partnerships with the Ocean or other FM29 architecture variants, as well as collaboration on efficiencies in the production process that may drive post-launch manufacturing and cost innovations, the company noted in a release.
Along with the previously signed agreements on electric vehicle (EV) platform sharing and ADAS package, the agreement finalizes the framework established between the two companies beginning in October 2020, the statement added. As part of the deal, Canada-based Magna will take a 6% stake in Fisker.
“Our complete vehicle systems approach, combining all elements of our portfolio, makes Magna’s proposition highly competitive — in capital efficiency, launch reliability and speed to market,” said Magna Steyr President Frank Klein. “Our collaboration with Fisker is an excellent example demonstrating the unique capabilities Magna offers as the go-to supplier when it comes to delivering world-class technologies and vehicles for our customers.”
Fisker offers a good hint as to what it plans to bring out by 2025.
Partnership accelerates timeframe, reduces costs
By teaming up with Magna, however, Fisker should be able to better spread out its assets as it won’t have to come up with the money needed to set up a factory to start building the Ocean SUV – a project that Henrik Fisker said should save as much as $1 billion.
Fisker also will have a ready-made, skateboard-style platform it can use to underpin the Ocean and some of the products scheduled to follow, amounting to more big savings.
The platform Magna has developed is slightly larger and will allow Fisker to make Ocean slightly larger. “So, it allows us to put in a third row and achieve class-leading range” with a larger battery pack than originally planned, said Fisker.The prototype featured an 80 kilowatt-hour lithium-ion pack. Fisker won’t say how much larger the new platform’s pack will be but stressed that it will allow the production version of the Ocean to top the longest-range version of the Tesla Model Y which currently manages 315 miles between charges, according to the EPA.
Cruise LLC CEO Dan Ammann announced the company secured a $5 billion credit line to buy the Origin shuttles it needs for its autonomous vehicle services from General Motors in a few years.
GM has already begun building the 100 pre-production Origin shuttles in Detroit.
GM — essentially Cruise’s parent company — will build the Origin’s driverless shuttles at its new Factory Zero plant in Detroit. To close the loop on this deal, the credit line comes from GM Financial, the auto company’s in-house finance arm.
The $5 billion credit line makes it so Cruise “can efficiently finance the expansion of our fleet as we scale up over the next few years,” Ammann wrote in a blog post Tuesday. “This bumps up Cruise’s total war chest to over $10 billion as we enter commercialization.”
Production is already underway as GM’s already built several pre-production models — a total of 100 are coming before they’re set for business.
Next step in the business plan
GM’s Factory Zero in Detroit is readying the first round of shuttles for validation and testing.
Ammann, who was previously president of GM before taking over as CEO at Cruise, noted in the blog entry that he’s excited seeing the first few vehicles already built and to have them begin the validation and testing process.
“Seeing them up close and in person is absolutely thrilling,” he wrote in the post.
The company, which also counts Honda and Microsoft among its investors, recently received the go-ahead to begin testing its self-driving technology in California from the state’s public utilities commission. The company is using Chevrolet Bolt EVs for the testing run.
To date, Cruise has fielded 300 modified Bolt EVs, logging 2 million miles of testing on public roads. Most are being run near its San Francisco headquarters, though others are operating in Phoenix, another popular test site for autonomous startups, including Waymo.
Cruise’s $5 billion credit line aims to ensure the business can operate efficiently.
Until recently, companies like Cruise, Waymo and others have been allowed to test their autonomous technologies on public roads, but only with a back-up “safety operator” onboard, ready to retake control in an emergency.
Autonomous businesses
The Cruise Origin is expected to be used in a ride-sharing service similar to what Google spinoff Waymo plans to set up. It is unclear whether the GM subsidiary may also sell the Origin or other products to competing ride-share services.
The first production models of the toaster-shaped shuttle are expected to be ready for 2023. The company already set to begin a commercial ride-sharing service in Dubai that same year.
The Cruise vehicles will use Level 4 technology that expands the range of roads on which they can operate without a driver onboard. The planned Cruise Origin shuttles won’t even have controls like a steering wheel or brake and accelerator pedals. Still, the vehicles will be “geo-fenced,” meaning they can be used only on specific roads and places and under defined conditions. It remains unclear when it will be possible to go the next step, fielding driverless vehicles that will be able to operate on their own, anywhere and at any time.
Most automakers posting May sales results enjoyed massive upticks compared to their year-ago results — except Ford Motor Co.
The Bronco Sport helped the company’s portfolio of SUVs keep its sales numbers positive in May.
Ford saw sales rise just 4.1% as inventories on its highly profitable trucks were very low, while Hyundai, Honda and others revealed triple-digit jumps for some vehicles and double-digit overall increases. No automaker has seemingly been hurt by the ongoing semiconductor shortage like Ford.
In fact, its retail sales results — excluding its fleet sales — were down 11.2% in May, a reflection of just how much Ford dealers are struggling to meet demand for the brand’s F-Series pickups. To be fair, CEO Jim Farley has repeatedly warned the second quarter would be the company’s worst due to the chip issue.
“Ford sales were up 4.1% on tight inventories, while year-to-date sales increased 11.3 percent,” said Andrew Frick, vice president, Ford Sales U.S. and Canada, in a statement. “Ford and its dealers are working harder than ever to match the right mix of inventory to best meet the needs of our customers at the local level.
“We have been receiving a massive number of reservations for our all-electric F-150 Lightning over the last two weeks — totaling over 70,000 trucks. Ford brand SUVs had their best May sales in 18 years, while Lincoln SUVs posted a new May record.”
SUVs carrying the company
Lincoln’s SUV, including the all-new Corsair, posted their best May since 2003.
The travails of truck inventories are well known. Fortunately, the company’s SUVs picked up the sales slack in May showing a 48.6% increase in total sales compared to last May and 27.9% on the retail level — again hurt by the chip problem.
Despite that difference, it was the company’s best May sales result for SUVs at the retail level since 2003. Ford brand SUVs were up 51.8% over a year ago on new product introductions of Bronco Sport and Mustang Mach-E, along with the continued momentum of Escape, Explorer and Expedition.
The Bronco Sport and Escape performed well in the highly competitive small SUV segment, officials noted. Ford’s May retail share is up almost 4 full percentage points in the small SUV segment, with sales of both Bronco Sport and Escape expanding their sales within two very different customer groups. Escape sales were up 51.4%, while the majority of Bronco Sport customers are coming from outside the Ford brand.
Lincoln SUVs did the Ford offerings one better, producing a record result last month. Lincoln SUV sales were up across the entire lineup in May with a total of 7,871 SUVs sold – up 24.3 percent. Perhaps just as impressively, the entire brand was up 5% and is up 15.3% for the year thus far. Those numbers are impacted by the massive drop in MKZ and Continental sales, which are no longer produced and dealers are trying to clear out remaining inventory.
The Mustang Mach-E is part of the reason why the company’s electrified vehicle sales were up 184% last month.
EVs going crazy
A Mustang Mach-E sits for just 10 days once it gets to a dealer and many are selling upon arrival. Mach-E sales totaled 1,945 in May, and 10,510 year-to-date.
The Mustang Mach-E is performing so well, the company is building more Mach-E’s than the original gas-powered pony car, according to Bloomberg. Ford’s plant in Mexico has produced 27,816 electric Mustang Mach-E models in 2021 while the Flat Rock, Michigan facility building the Mustang has churned out 26,089 vehicles, according to production data the automaker released Thursday.
Erich Merkle, Ford’s sales analyst, told Bloomberg that Mustang production in Flat Rock has been hampered by the chip shortage. However, Farley told a group of journalists after the introduction of the F-150 Lightning the Mach-E is outperforming expectations and its completely sold out of its initial production run.
Strong Mach-E sales doesn’t mean that the Mustang has suffered. The all-new Mustang Mach 1 helped lift performance Mustang sales to more than 13% of retail sales, compared to 10% last year, the news agency noted.
Overall, Ford electrified vehicle sales skyrocketed 184% last month, some of which was driven by the aforementioned Mach-E, but it wasn’t alone, officials noted. F-150 PowerBoost totaled 2,852 for the month, Escape electrified sales totaled 3,617 – up 125% over last year. Explorer Hybrid sales also had a big increase of 132% compared with a year ago on sales of 1,156 SUVs. The future looks bright on that front as well. The previously mentioned F-150 Lightning secured more than 70,000 deposits since its debut about two weeks ago.
General Motors is looking to go to the moon again.
A new generation of lunar rovers under development by Lockheed Martin and GM could be used by Artemis astronauts in 2024.
The Detroit-based auto company, which produced the lunar rover for the Apollo 15 mission to the moon, is partnering with Lockheed Martin to develop and produce a “lunar terrain vehicle,” or LTV, for use by for NASA’s Artemis program.
The goal is to design and build a vehicle that allows astronauts explore more of the moon’s surface “than ever before,” according to GM officials. The LTV is just the first of several types of vehicles needed to help get astronauts across the moon’s surface.
“General Motors made history by applying advanced technologies and engineering to support the Lunar Rover Vehicle that the Apollo 15 astronauts drove on the Moon,” said Alan Wexler, senior vice president of Innovation and Growth at GM, in a statement.
“Working together with Lockheed Martin and their deep-space exploration expertise, we plan to support American astronauts on the Moon once again.”
EV expertise + experience = LTV job
NASA needs a vehicle capable of traveling the lunar South Pole.
GM enjoys the advantage of having done this before. It aided NASA in the development of the agency’s Apollo Moon program, having developed, tested, integrated and produced the inertial guidance and navigation systems for the series, in particular Apollo that put astronauts on the moon for the first time in 1969.
Additionally, it helped to develop the Apollo Lunar Roving Vehicle (LRV) for Apollo 15-17. The all-electric LRV never drove farther away from NASA’s based than 4.7 miles during its time on the moon’s surface. Fortunately, GM’s electric vehicle technology has advanced substantially since then.
The new vehicles aim to travel “significantly farther distances,” including the moon’s South Pole, which is cold and dark with severely rugged terrain. The vehicles will also need to be able to haul plenty of equipment in addition to people. NASA, according to reports, is looking for a vehicle to be able to travel about 600 miles on a charge and about 6,000 miles in a 42-day period.
The GMC Hummer SUT, which is set to debut later this year, recently went through some extreme winter testing, which may lend the company’s engineers some much-needed insight into how their current battery technology will fare in the far-colder reaches of space.
A rendering shows how the Hyundai TIGER X-1 could maneuver across the moon.
Not the only automaker with lunar plans
GM isn’t the only auto company working on lunar vehicles, in fact, it may be described as the latest to prepare a vehicle to be driven on the moon. Earlier this year, Hyundai unveiled its autonomous, all-electric TIGER X-1, which it claimed could be used on the moon.
However, Toyota’s been working diligently with the Japanese Aerospace Exploration Agency, or JAXA, to develop a new lunar rover for its moon mission in 2030. The automaker started the project in 2019 and proceeded quickly enough that it expressed hope that NASA would use its vehicle for the 2024 mission to the moon.
The Lunar Cruiser, as Toyota calls it, is a six-wheeled, hydrogen-powered rover, and it made it clear that while the project began as a JAXA-inspired vehicle, it hoped the U.S. space agency would take notice.
“We have now found a new ‘road,’ which is the moon. And for this new road, we will be able to make a new vehicle,” Takao Sato, project head of Toyota’s Lunar Exploration Mobility Works and a former interior design engineer who worked on the Prius hybrid, told Automotive News. “This is a dream for us.”
Toyota is developing a lunar land rover that the company hopes NASA will use for a 2024 lunar mission.
Audi also prepared a remote-controlled buggy to be used on the moon in 2016. The German maker supported a team of scientists chasing the Xprize, hoping to launch their mobile lab atop an Indian rocket. The goal was to have it travel nearly a quarter-million miles before landing on the Taurus Littrow Valley — which just happened to be the last place an Apollo moon mission landed nearly 50 years ago.
GM’s first lunar models
The company’s first LRVs were battery-powered four-wheelers that they stripped down as much as possible to permit them to be loaded onto a Saturn V rocket for launch. They also folded so they could be loaded in the cargo back of the Apollo mission’s Lunar Excursion Module, or LEM.
Power was provided by what was, for the time, a highly sophisticated 36-volt silver-zinc potassium hydroxide batteries. They weren’t rechargeable, which didn’t matter on a one-way mission like Apollo — that’s likely to change this time around. The key was the battery pack’s durability in the moon’s devastating environment. Maximum range was 57 miles, though the longest distance driven was 22.3 miles on Apollo 17 – with the astronauts never getting more than 4.7 miles from their LEM base.
The first vehicles were somewhat purpose-built models, but GM is expected to develop — in concert with Lockheed Martin — a variety of vehicles. Autonomous, self-driving systems will allow the rovers to prepare for human landings, provide commercial payload services, and enhance the range and utility of scientific payloads and experiments.Lockheed, which will be leading this effort, has produced vehicles used for every Mars mission thus far, including the 11 spacecraft that has carried the rovers used on the Martian surface to the Red Planet.
The merger of Fiat Chrysler Automobiles and the PSA Group created an automotive powerhouse now called Stellantis, but it’s also produced a jumble of 14 individual brands. And CEO Carlos Tavares says each of them will have to prove their worth — though he’s giving them time to do so.
Stellantis’ North America offices in Auburn Hills, Michigan, house Chrysler, Dodge and Ram — which may not make the final cut.
Even before the merger there was widespread speculation that some FCA brands might be on the chopping block due to declining sales. But the merger adds a layer of complexity, especially at a time when Stellantis must pick up the pace of its electrification and mobility services programs.
As an executive known for moving quickly, Tavares seems to be in no rush, however. Instead, he appears to be willing to let all 14 of the Stellantis brands lay out plans and prove they’ll work.
Showing the love
“For the time being, we love them all,” the Portugese-born executive said during a webinar sponsored by Automotive News.
“Each (individual brand) CEO has 10 years for which I am telling him or her that he has the funding, the ability to build his long-term business plan and plan for the different product launches and technologies to make the brand grow or rebound and create value for the company.”
Smoke and mirrors won’t help the Dodge brand make the cut in the long term.
Post-merger, Stellantis has more individual automotive brands than any other company, even Volkswagen’s dozen. The list includes a handful of truly global marques, such as Jeep, but most focus on specific markets or regions. Ram is largely limited to the Americas, while Peugeot and Citroen abandoned North America back in the 1990s. Some, like Jeep, have posted dramatic growth in recent years. Others, including both Fiat and Chrysler, are struggling.
A troubled future for two namesakes
In fact, the two namesake Fiat Chrysler marques have been teetering on the edge almost since the day FCA was formed a decade ago. Former CEO Sergio Marchionne had largely shifted focus — and resources — to two Italian brands, Alfa Romeo and Maserati. But the grand plan the late Marchionne laid out has yet to pay off despite billions of dollars spent on new products.
When the FCA-PSA merger plans were announced in 2019 many analysts thought that a retrenchment was inevitable. And they pointed to Tavares, who was designated to become Stellantis CEO, as someone unwilling to tolerate ongoing losses.
The Pacifica is currently one of only two offerings from the once iconic Chrysler brand.
But the 62-year-old executive has also shown a willingness to give struggling brands a second chance. That became apparent when PSA completed the acquisition of long-struggling Opel-Vauxhall in 2017. The German-based manufacturer had lost billions under the ownership of General Motors during the prior two decades. Yet Opel wound up back in the black within the first year it was run by Tavares.
By the brand
Whether he can pull off a similar turnaround with the other Stellantis brands is far from certain. Fiat and Chrysler are clearly going to be the most trouble, according to analysts. The U.S. marque now offers only two models, the aging 300 sedan and the Pacifica minivan, not much on which to base a brand. Fiat’s U.S. turnaround fell flat and it is barely hanging on there. It’s continued to lose ground in its home European market, as well.
Dodge isn’t in much better shape. It does have a loyal following for its Charger and Challenger muscle cars, as well as the Durango SUV. But it will have to adapt to a world in which electric drivers, rather than supercharged Hellcat V-8s, rule the road.
Jeep’s new plug-in hybrid only continues to expand the brand’s global popularity, making it virtually assured of surviving long term.
Alfa and Maserati are still works in progress but have yet to deliver the sort of sales and earnings numbers Marchionne predicted at an FCA investors seminar shortly before his untimely death in July 2018. Both brands are making major changes to their product programs, among other things, increasing focus on electrification.
Only Jeep and Ram, of all the FCA brands, have a strong and clearly identified path laid out for them. But both must also adapt to an electrified future.
Europe has its own issues
The French Stellantis brands appear to be a bit better positioned than their Italian and American counterparts, but Peugeot, Citroen and DS have their own challenges, especially when it comes to entrenching themselves in China, the world’s largest automotive market. And, shortly after the FCA-PSA merger was completed this year, Tavares called off plans to return Peugeot to the American market.
Stellantis instantly became the world’s fourth-largest automaker based on vehicle sales once the deal was completed. But it lags behind its three largest competitors, Volkswagen Group, Toyota and the Renault-Nissan-Mitsubishi Alliance, in some key categories. That includes not only a weak presence in China, but also a slow push into both battery and autonomous vehicle technologies.
It appears that Tavares is looking to give each Stellantis brand enough time to define the path forward, rather than racing to cut them out of the family.
