I’ve suddenly started to see a few articles like this:
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Lots of talking heads on youtube posting hysterical headlines. Maybe might be able to believe a tiny fraction of it, like the part about falling sales, but the entire company imploding in a matter of months?
Steve
I’m currently driving a 20-year-old Nissan Altima with the super reliable 3.5 litre V-6 engine. Fortunately they sold enough of these that there is a robust supply of third party spare parts available.
Nissan was in much better shape when Carlos Ghosn was running the show. {{ LOL }}
intercst
Meanwhile CEO of Stellantis resigns. He tried to cover costs by raising prices but lost market share. Lots of unsold cars on dealers lots.
How far can cost cutting go before you eat into the muscle and bone?
And how will tariffs impact the business?
Auto industry has very low PEs indicating investors expect earnings to fall. Falling knives anyone? Or will some go bankrupt? Will the Trump administration bail them out? Will stock holders keep their equity? Or be wiped out?
Tavares was not “covering costs”. He was inflating operating margin. Traditional auto industry operating margin has been 5-6%. Tavares pushed it over 11%, post-plague. He cheapened the cars, and raised the price, at the same time, to fluff up the margin. But then they couldn’t work the post-plague “shortage” narrative anymore. The big “crisis” was when he cut guidance to 5.5-7% for this year, that is, a return to normal margin. NOT ACCEPTABLE bellowed the Board.
Here is a table of PSA/Strabismus operating margin. Tavares took over as CEO and Chairman in 2014. Look at how operating margin jumped, right after the plague, when everyone was leveraging “shortage” and “supply chain disruption” to gouge the living daylights out of their customers.
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