Automakers thrived in the pandemic. Many are now struggling.
Automakers thrived in the pandemic. Many are now struggling.
Summary
The global auto industry, once buoyed by pandemic-era shortages and high prices, is now facing significant challenges.
Major automakers like Nissan, Ford, and Volkswagen are cutting thousands of jobs and closing factories due to falling demand, competition from Chinese carmakers, and rising protectionism.
Chinese brands, offering cheaper and innovative vehicles, are gaining market share, pressuring Western automakers, particularly in China.
The shift to electric vehicles (EVs) is proving costly, with sluggish demand in some markets and government subsidies declining. Some companies, like GM and Toyota, are faring better with strategic EV and hybrid models.
Automakers enjoyed huge profit margins with the shortages since they could charge much more for fewer vehicles. Now that supply is back up, there is nothing justifying these ridiculous prices and they're crying. Too bad. Also funny how they had the government shut out Chinese competition in domestic markets but they're still losing in the China market even though there aren't 100% tariffs on their vehicles there.
Prices on new vehicles are totally fucking outrageous. So sorry the $10K markup is no longer sustainable.
But that era is over and the industry has reverted to its prepandemic state, with too many carmakers chasing too few buyers.
That’s their own damn fault. They all got this idea that every car brand could be a luxury brand. They left behind consumers. They cut their affordable models and have left the sedan and even now many compact segment vehicles in the dust. Consumers should now leave them behind in turn. The future can’t possibly be luxury SUVs, pickups, and sports cars for everyone.
Corporate executives couldn’t see past the next quarter. And now, I won’t be surprised if governments force their losses to be socialized. Stellantis executive quit recently after seeing the writing on the wall. Make the money, let it crash and burn. That was always the plan.
Fuck em and the SUV they came in. Eat shit.
Regular-ass pickup trucks are really hard to buy, too. Trying to find a F150 XL on a lot is tough, and the pricing isn't that much better. Too many luxury trucks, too few work trucks. The PRO dealers don't even want to talk to someone looking for a single truck in my experience or I'd just buy from the dealer with nothing but plain white on the lot.
Yeah I have no clue why a compact, affordable, hybrid truck like the Maverick just can't be made fast enough and flies off the lot.
Surely it's not being a compact truck. Or it being affordable for new. Of course, it's not also having a hybrid option.
No, it's gotta be anything else other than that. So make sure there are more of the huge, expensive, gas chugging things on the lot.
Perhaps companies should have “rainy day” funds in case of a downturn like they tell average citizens.
🤔
An interesting thing I found out from this article is that the drop in demand is due to non-Chinese companies not being able to compete in the Chinese market. The incoming tariff war will only make this worse. Donald Trump may be thinking he is putting American Manufacturing first, but in reality he is cutting off American companies from the largest market in the world.
He doesn’t actually care about America first, just Donald first. Tariffs are merely a bargaining chip that he can use to encourage bribes in order to get exemptions, or a cynical market play that makes him and his masters money at the expense of the economy . Or hell, the likeliest could just be Putin tugging on the leash to get him to hurt the US economy as much as possible, though if the energy markets bottom falls out, Putin might be in actual trouble
Donald Trump may be thinking
Doubtful.
I'm positive his "brain" consists of two knife welding rabies infected rats in Nazi uniforms fighting over rancid cheese.
Part of the demand drop is that automakers aren't making a product consumers want to buy. They got lazy during the pandemic, and now that the sugar rush has ended their “cutting out entire product lines that appealed to the common buyer” has come home to roost.
You can only sell so many $100k pickups.
EDIT: Added quotes to make the sentence easier to read. My grammar is weird.
Not just a product that consumers don't want to buy, but one that most consumers can't buy because of high prices and low wages.
I purchased my current car used. I plan to purchase my next car used. The new car I bought in 2016 will likely be the last brand new car I ever buy (I know buying used typically makes more sense anyways, but the point still stands).
They're building to skirt regulations (efficiency requirements scale related to vehicle size) instead of just making the small reliable vehicles that almost everyone actually needs. The increased size of the average vehicle also leads some people to prefer larger vehicles themselves even if they don't need them. Try driving a smaller car and see how much more often you're blinded by headlights, both oncoming and from behind.
I don't know what the solution is but I'm glad to hear car makers are not seeing massive success with the current oversized lineups.
well there's a simple solution to that: make cars that people want to buy.
I was in the market for a car recently. I wanted a small city car. All the big players have now is crossovers and suvs.
So that's why I got a chinese made vehicle. It was what I wanted, and it exists. The reason I didn't buy something european is because none of them make anything I'd want to buy anymore. Maybe the fiat 500, but that's a bit too pricey, imo.
Good, let's not bail them out again. Let the market decide.
I'm paying whoever can give me a barebones 4 banger turbo diesel mini truck/van, ute, or station wagon please. With a manual transmission preferably.
"Thrived"?
Somebody wasn't working in the industry during the pandemic I guess...
Parts shortages driven by the one-two punch of the pandemic + the invasion of Ukraine led to a massive inventory of cars that could not be sold because manufacturing wasn't complete:
https://www.cbsnews.com/news/ford-motor-losses-chip-shortage-rivian/
Then, the used car market exploded because people were unable to complete lease returns as there weren't new cars to trade in for.
So, no, the automotive industry was not "thriving" during the pandemic.
Can confirm, I waited 6 months for a new car delivery (off catalogue, it wasn't anything fancy or custom) and when delivered it lacked some electronic functions they promised at sale. At least I got a discount.
Also the pandemic is one of the things that broke Elon.
There is no reason they should have thrived during the pandemic, they should have been taking a hit just like the customers. If they were taking increased profits, then it's because they were screwing over customers during a challenging time.
Any auto maker that focuses on practical/efficient/affordable will benefit in the long run, and the fact that another country is more focused on that, makes the real threat of competition.
