Some Car Brands Are Probably Going To Die

Illustration for article titled Some Car Brands Are Probably Going To Die
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Stellantis includes 14 brands and some of them may die, Tesla is delivering a China-made Model Y, and also senior citizens. All that and more in The Morning Shift for January 19, 2021.

1st Gear: Some Stellantis Marques Seem Likely To Die

Stellantis, which is what the merger of Fiat Chrysler and Groupe PSA has named itself, includes 14 different brands. Let’s reel them off: Fiat, Chrysler, Peugeot, Opel, Jeep, Maserati, Dodge, Ram, Citroën, DS, Alfa Romeo, Vauxhall, Abarth, and Lancia.

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You forgot about Opel and DS, I know. It’s all right, this is a safe space, you can admit it. Anyway, that’s a lot of brands! Probably one or some of them will die in the U.S., according to Automotive News. Two of the most vulnerable brands appear to be Fiat and Chrysler:

The high points of the post-merger blueprint in North America are no secret: Churn out as many Ram pickups as possible and push Jeep into higher price points and new segments.

But Stellantis executives will have to figure out how the rest of FCA’s expansive brand roster fits into the long-term puzzle and whether cuts need to be made.

Chrysler is down to two minivan nameplates and the aging 300 sedan. Alfa Romeo is seeing signs of life — its U.S. sales grew 1.6 percent in a down market last year — but volumes are low for the Giulia sedan and Stelvio crossover.

Fiat has been hanging on with its line of small cars, but its slowing sales have dropped even further amid the pandemic, falling by more than half last year to just 4,303 vehicles. Meanwhile, Dodge has carved out a niche as the muscle brand, but it has no electrified offerings, and two of its three nameplates still in production are cars in a market that’s heavily tilted to SUVs and crossovers.

Add in the seven brands that PSA Group is contributing to the merger, and some streamlining appears likely. But killing any FCA brands wouldn’t be an easy decision or process, even though almost none of the company’s dealerships are single-brand stores that would be left out in the cold.

“You need to be really prudent if you’re thinking of killing a brand as a parent company,” said Karl Brauer, executive analyst for iSeeCars.com, a used-car search site. “I look at two brands like Fiat and Chrysler. It seems certainly easy to imagine them going away, that they’re not justified given their sales volume and market share. But I also feel all those rules that we would have normally been assuming for [FCA] are different now because of the merger with PSA.”

Dodge is the “muscle brand.” For some reason I can’t stop saying “muscle brand” in my head.

2nd Gear: More Stellantis

Investors like the merger. For now.

From Reuters:

Stellantis, the carmaker created by combining Fiat Chrysler and Peugeot-owner PSA, enjoyed a positive start on Monday, its shares rising 8% on their European market debut and valuing the business at around 42 billion euros ($51 billion).

[...]

“We have the scale, the resources, the diversity and the knowhow to successfully capture the opportunities of this new era in transportation,” Chairman John Elkann said in a video on the Borsa Italiana website to mark the occasion.

Chief Executive Carlos Tavares said the merger would add 25 billion euros in value for shareholders over the years, thanks to projected cost cuts.

“I can tell you that the focus from day one will be on the value creation that is the result of the implementation of those synergies,” Tavares said in the same video.

Fiat Chrysler (FCA) and PSA have said Stellantis can cut costs by more than 5 billion euros a year without plant closures.

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Stellantis’s $51 billion is a lot of money, but as of this writing Tesla is worth nearly $800 billion (on paper).

3rd Gear: Last Year Was The Worst Year For Car Sales In Europe On Record

No one had a good year last year. Even if you did, no one wants to hear about it. The news for automakers in Europe is in line with everything else.

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From Bloomberg:

European car sales plunged the most on record last year as relatively resilient demand in the second half did only so much to make up for the collapse during the initial outbreak of Covid-19.

New-vehicle registrations fell 24%, the European Automobile Manufacturers Association said Tuesday, the biggest annual drop since records began in 1990. A strong finish to the year for Volkswagen AG and PSA Group limited the industrywide decline in December to just 3.7%.

Carmakers managed to better cope with government measures to contain the spread of the coronavirus as the year rolled on, helped by subsidies and dealers embracing online-ordering tools. But the collapse in sales in March, April and May proved difficult to come back from, with the industry managing a single month of growth all year. By contrast, China’s auto market expanded throughout the second half.

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4th Gear: Tesla Spoke To The Media!

The news here is that Tesla is now delivering China-made Model Ys, but I’m more preoccupied with the fact that Tesla actually made a comment to the media. It has been utter silence from the California company for a while now.

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From Reuters:

Tesla Inc said on Monday it has started delivering its Shanghai-made Model Y sports utility vehicles to customers in China.

A representative for the U.S. automaker made the comment in response to a query from Reuters.

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5th Gear: There’s A Bit Of A Reckoning Happening In Japan With Senior Citizens And Cars 

Nearly a third of Japan is older than 65 and it’s an ongoing debate there (and everywhere else) how old is too old to drive. Automakers are adding safety features, and many seniors there are voluntarily giving up their license after a horrific accident in 2019.

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From Bloomberg:

According to the National Police Agency, 350,428 people 75 or over returned their driver’s licenses in 2019, the highest on record.

[...]

Last year, Toyota upgraded its Safety Sense offering. The technology is designed to prevent or mitigate frontal collisions as well as keep drivers within their lane. By using high-resolution cameras on the windscreen and bumper-mounted radars, it can detect oncoming cars or pedestrians — or even bicycles in daylight hours — and give audible and visual alerts. If drivers fail to respond, automatic braking may be deployed. The new software also has intersection functionality to help detect oncoming obstacles if a car is making a turn from a stationary position.

Other Toyota Safety Sense features include the correction of unintentional lane departures, automatic toggling between high and low-beam at night depending on surrounding traffic, and the detection of slower-moving cars ahead on a highway and automatic maintenance of a pre-set distance. Road-sign assistance technology detects stop and speed signs as they’re passed and displays a dashboard alert in case drivers have missed them themselves.

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Subaru Corp.’s aspirations are similar; it wants to eliminate all fatal accidents by 2030. Like several other automakers, it’s using stereo cameras, which have two or more lenses with a separate image sensor for each, providing the ability to capture three-dimensional images. Dubbed EyeSight, the technology looks ahead and alerts drivers to any danger. Subaru says Eyesight-equipped vehicles are involved in 61% fewer accidents and 85% fewer rear-end crashes. Pedestrian-related injuries are lowered by 35%.

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Reverse: Zeppelin

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Neutral: How Are You?

The guy across the street from me spends roughly 90 percent of his time buffing and waxing and babying his old Chrysler hot rod. I wish I loved anything that much.

News Editor at Jalopnik. 2008 Honda Fit Sport.

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DISCUSSION

1st: Would anyone really miss Fiat? It would be a shame for Chrysler to go away, considering how good the Pacifica is. Dodge is definitely heading towards death, you can’t just hellcat everything and offer nothing else that people want. Bring over Citroen and Peugeot!