It’s been a rough few years for customers of the various Stellantis brands, and I’m not certain that’s going to improve in the foreseeable future. It’s also been a tough time for dealers and workers, who can expect its absurdly high “days on lot” figures to drop as Stellantis execs cut production and unfortunately lay off workers.
The big talk of the day is how Stellantis is cutting back, but this was inevitable to some degree as the company tries to fix its inventory issues. For workers, it’s bad news. For weary consumers, this might be a bit of good news as we could be reaching a key point in time where incentives and inventory are simultaneously high. Eventually, one of those has to give.
And, eventually, Stellantis CEO Carlos Tavares has to go. It wouldn’t be a Morning Dump if at least one of our stories didn’t have our favorite exec show up, right? The plan was to let Tavares run out his contract and depart in early 2026. Rumor has it that Tavares might be getting pushed out of the plane before it lands (metaphorically speaking), but at least it’ll come with the mother of all golden parachutes.
The grass is always greener on the other side, they say, but in the case of Stellantis v. Volkswagen that might be a little hopeful. Perhaps it’s better to say that the grass is a little less on fire on the other side. VW’s Q3 financials are bad. Real bad. Revenue wasn’t a complete miss but margins were in the toilet.
Sometimes low expectations are helpful. Sometimes it’s nice for the bar to be on the ground. Aston Martin also released its financials, and they’re better than people thought, which is to say they lost less money than analysts predicted.
Take The Money And Run
It’s time again for my favorite chart, via Cox Automotive/vAuto, which shows how many days worth of cars different dealers have on the lot. A healthy number is 60 days, the average is 68 days, and earlier this year every Stellantis brand was way, way above average. Ram has been so bad that Ram isn’t even on the chart.
There are two main variables that give you the number of selling days: supply and demand. If you’ve got a ton of cars but they’re selling super fast then it’ll stay low. For the last year, Stellantis has seemed intent on making these worse for its Chrysler, Dodge, Jeep, and Ram dealers by both building a ton of uncompetitive cars and then refusing to give reasonable discounts on them even as much of the competition started dumping cash on the hood.
Dealers flipped out and now Stellantis is trying to address both problems simultaneously. First, Stellantis told its dealers it’ll provide more money to help move cars and, indeed, the company reportedly just added a bunch of cash for “conquest” buyers who want certain Dodge, Jeep, or Ram products. Specifically, Stellantis is targeting Ford buyers who come over to get a Durango, Wrangler, Grand Wagoneer/Wagoneer, Grand Cherokee, or Ram 1500 with an extra $2,000.
Incentives are always good for buyers, and they’d last forever if Stellantis kept pumping out vehicles. Understandably, that’s not going to happen according to The Detroit News:
Stellantis NV continued to slash vehicle production and cut jobs in the United States this week, including at the automaker’s Detroit Assembly Complex where the Jeep Grand Cherokee and Dodge Durango SUVs are built.
Vehicle production at both the Mack and Jefferson sides of the east-side complex is paused this week, with workers temporarily laid off. Notices sent to workers said certain positions were still expected to report. Mack builds the Grand Cherokee, while Jefferson makes both the Grand Cherokee and Durango.
“Stellantis continues to take the necessary actions to align production with sales,” said a company statement sent by spokesperson Ann Marie Fortunate. “This includes making production adjustments at both Detroit Assembly Complex plants. The Company will continue to monitor the situation to assess whether further action is required.”
This follows other recent cutbacks. Hell, Chrysler only makes the Pacifica now, having ended 300 production. Obviously, this is a shame for workers at these facilities, even if the recent UAW contract helps preserve some of their income.
If you’re a consumer and you’ve been turned off by high prices and you’re interested in something from one of the traditional Chrysler brands then now might be the best time to act. Incentives are high as Stellantis wants to calm down dealers and the company is also rightsizing production, so there may be fewer cars on dealer lots eventually (these changes will take weeks to filter through the system).
Is Carlos Tavares Getting An Early Exit?
Stellantis CEO Carlos Tavares, pictured above, managed to survive a recent executive shakeup, albeit with the stated intention that he’d have to retire in a little over a year. This after rumors that Stellantis NV Chairman John Elkann was already looking for a replacement. Tavares was supposed to make it until 2026, but rumor has it that he might finally get to finish Finnegans Wake next year as he’ll be granted an early release from the company.
This rumor comes from the Italian news site Affaritaliani.it and it’s a whopper:
That Carlos Tavares is ready to hang up his CEO boots and leave the reins of Stellantis in 2026 is now known to everyone. The aim is to choose the new leader already in the first half of 2025, to ensure a smooth handover, whether it is internal or external. Yet voices very close to the world of the old Fiat tell Affaritaliani.it that Tavares could leave by the end of the year, with a mind-blowing severance package (the figure could even reach 100 million euros). And not only that. An “extra” severance package with shares or a stake in a premium brand of the group is also reportedly being evaluated. In short, a noteworthy exit strategy and in line with the salary that the Portuguese manager has pocketed up to now (23.5 million in 2023, ed.)
But it doesn’t end there. There are also rumors that the owner , John Elkann, is pushing to have Carlos Tavares leave Stellantis earlier than expected, on the advice of his lawyers, in light of a possible trial related to money laundering, offshore accounts and tax evasion in which the brothers Lapo and Ginevra would also be involved, after the investigation opened by their mother, Margherita Agnelli. A significant shake-up that could tamper not only with the leadership of the group, but also with the “delicate” family safe, Dicembre.
Sure. Honestly, if I were Tavares I’d love this rumor. What’s better than not having to be CEO of Stellantis anymore? Getting paid $100 million to not do the job (the Euro and USD are close enough). I’ve also heard a rumor that I’m being demoted to Assistant Publisher and being given $100 million as a bonus.
Who would replace Tavares? People seem to think Renault’s Luca De Meo.
Volkswagen Is, Eh, It’s Not Great
Not that I want to focus on bad news, but I’ve already said this week that it looked like Volkswagen might try something drastic to reverse its plunge, and it seems like this quarter’s financials might be decent pretext.
Revenues hit $85 billion, which is up a little from last year, but operating profit fell 42% compared to Q3 2023 to just $3.1 billion, which is an operating margin of 3.6%. That’s real bad and worse than expected. The chart above shows what the first nine months look like for the company and it’s dire.
From VW’s CFO Arno Antlitz:
Our nine-month results reflect a challenging market environment and underline the importance of delivering on the performance programmes we have launched across the Group. Volkswagen Brand reported an operating margin of only two per cent after nine months. This highlights the urgent need for significant cost reductions and efficiency gains.
Our product momentum gives us confidence. A significantly improved order intake in Western Europe in Q3 year-on-year is testament to our strengthened product line-up, from combustion engine cars to hybrids and full-electric vehicles.
Excuse me, from what-to-what? Oh, right, VW is finally doing hybrids.
This is a bad look, and the only two groups making any sort of decent margin are the Sport Luxury brand group (Porsche, Lamborghini, Porsche Financial Services) and its TRATON Commercial Vehicles group. There is the Rivian investment to consider. Also, if you want to get conspiratorial, it would probably be better at this point for Volkswagen to make its numbers as terrible as possible if only as an excuse to take drastic action.
Aston Martin Is Not Doing As Poorly As You’d Have Guessed
If you’re a Fernando Alonso fan you might have some mixed feelings about Aston Martin. The same might be true if you’re an investor. Don’t worry! Alonso is retiring and things might not be as bad as they once seemed for people with a financial stake in the company.
After hinting at a rough year due to sales in China and supply chain disruptions, the company released its Q3 numbers and, though not exactly rosy, they aren’t grim either. The company only lost about $16 million pre-tax in Q3, an improvement of 90% over last year.
This is better than expected and the company belives things might turn around a bit:
Following the successful launch of the new Vantage and DBX707, with deliveries commencing as planned at the end of Q2 2024, performance in Q4 2024 will benefit from all next generation core models available in market including initial deliveries of the V12 flagship Vanquish. In addition, Valiant, the ultraexclusive Special, remains on track with the majority of deliveries expected by year end, concluding the current programme of Specials.
Good for them.
What I’m Listening To While Writing TMD
Oh man. When Scottish band Garbage came out I was both a little scared and, because I was a 12-year-old boy, very excited when the video for “I’m Only Happy When It Rains” came on MTV so I could see Shirley Manson glower at me from a partially demo’d bathroom. Rewatching this video again I still get it.
The Big Question
What would Shirley Manson drive in 1995, when the self-titled Garbage album debuted? What would YOU drive if you had to buy a new car in 1995?
“Don’t worry! Alonso is retiring…” -MH
I’m not sure where you get your information, but this weekend in Mexico he said he was planning to see out his current two year contract and see what things look like in ’26 before making a decision.
You underestimate Stellantis’ ability to make even shittier cars in the future.
Unless you think it has no future.
And even then, the cars STILL not selling now will be even cheaper in the future.
Car shopping in 1995. Fantasy land – I’ll take a NSX and daily drive it for the next 30 years. But a 993 911 would be tempting too. More reasonable choices than the Ferrari 355 or 456 which were also awesome.
In the more “realistic” price range? MR-2 Turbo or Prelude Si.
A quick check of Pacifica prices doesn’t show a better deal than last time I checked about a month ago. If anything I am seeing fewer cars with $10k+ on the hood like last time. Not sure how cheap they’d have to get for me to roll the dice on a Pacifica AWD plus Mopar warranty.