Stellantis has margins in n america 30% or more higher than everyone else. And a finance subsidiary, finally. Does that mean an incentive war that it can win easily enough? At gm and ford 's expense?! "Bleed'em" via rebates? Watchout gm especially ;-) their finance units have contributed 20%+- to gm and ford earnings all these post2008 years. Not so fca. But as the business and macroeconomic cycle endgame is here: watchout since stellantis has the financial er margin to bleed em dry IF they decide to go that route (outspend on rebates, higher low margin fleet sales, cheapened financing....)
Buildup of Stellantis inventories
Anyone notice that RAM, Jeep, Dodge and Chrysler have the largest inventories of vehicles.
The consensus is they have priced themselves out of the market. Any thoughts?
The consensus is they have priced themselves out of the market. Any thoughts?
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Hey this IS the endgame ie recession(?!) They have the margins pecisely so as to get through it to victory ie FINANCIAL survival/profitability with no net debt IN and THROUGH this the economic and business cycle that began in 2008/9. It will take rebates+cost cutting+cheaper financing+inventory reduction+layoffs etc. SAME is true of every other firm...except that unlike stellantis most cannot afford to financially since.....their breakeven points are not as low BY DESIGN as stellantis'. 30-40% of sales. They'd only be dead again if they also still had say a dart chrysler 200 journey cherokee etc to support through a more or less certain and predictable sales and financial recession. Managing for survival and earnings "...in and through the cycle..." Marchionne said. Well here is the endgame of the cycle. So let's see....
Some of this inventory is i believe meant for pre ordered vehicles that have taken months to deliver, so the excess inventory being cited here may in fact be lower....since they under delivered vehicles last year. Regardless if this is a recession at least for car sales then another shakeout will happen just like 2008. Having loss making compact sedans etc would'v only made matters worse. Besides the whole point of the merger is geographical diversification for survival in and through usa andor europe recessions. Now if recessionary conditions become extreme like 2008+.over the next year.... :-()
This is just the start potentially of the navigation above all financially of the slowdown or worse recession. He who laughs last....etc....(financial and brand health through a potential recession) we'll see by year endI call BS. Why is it only affecting FCA USA? Think the excuses through before making them.
Well tavares just said he plans on cutting costs faster than 'loss of pricing power' now underway possibly in n america....as a way of ensuring profitability and new ev investments through this potential downturn. He also said the firm was resilient in n america since it breaks even at just 40% of sales.THAT, friend, is a VERY slippery slope, and one which ought to be avoided to help protect the long term health of the company. My only hope is that there is enough Groupe PSA DNA in STLA to prevent pursuing a strategy that the former FCA would VERY LIKELY pursue!
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