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Stellantis declares bankruptcy in China, with $1B in debts
- aetherspawn 1y agoI am an automotive components supplier and I’ve always wondered how automotive giants are staying open or even turning any profit at all (1) Between this, Nissan and a dozen others, I guess there’s a lot of running-on-debt going on. 1: it’s so difficult with the latest round of laws making a very high level of ADAS mandatory. Huge spend in R+D, particularly software and vertical integration, and then again huge spend on the physical car electronics.
- deepsun 1y agoNew cars prices doubled in the last 20 years. If anything, I would expect them to make record profits actually.
- lynx97 1y agoThat is called inflation. Almost everything doubled its price in the last 20 years. My rent, for instance...
- thrwaway55 1y agoThis is honestly tighter then you might think accounting for inflation. A 2000 1$ is 1.87$ today. 2005 seems like they should be doing a lot better since it's 1.65$ but it's not nearly as gangbusters as this comes across.
- epolanski 1y agoThat doesn't cope with less vehicles being sold overall and inflation, even if margins on a single car have never been higher I think (at least in US).
- metaphor 1y ago> New cars prices doubled in the last 20 years. In the US, authoritative data sources[1] suggest otherwise. [1] https://fred.stlouisfed.org/graph/?g=1KzJF https://fred.stlouisfed.org/graph/?g=1KzJF
- Mindless2112 1y agoThe CPI's hedonic quality adjustment means that this graph doesn't mean what you think it means.
- UltraSane 1y agoCars HAVE gotten a LOT better over time.
- slaw 1y agoCars today are better than 50 years ago, but not much better than 15 years ago.
- reaperducer 1y agoCars today are better than 50 years ago, but not much better than 15 years ago. You must be young. Cars used to last five years before falling apart. It helped drive the whole auto leasing industry, because nobody wanted something that turned into an old rust bucket in half a decade. The reliable Japanese cars came in, and every marker suddenly started offering five, eight, and even ten year partial warranties. Today, a ten-year-old car is very common. I kept mine until it was 12-years-old, and in that time it never had a breakdown. Just tires, oil changes, and many lightbulbs. My previous cars (Volkswagen, Isuzu, Ford, Ford, Mercury) had long been scrapped by then.
- msgodel 1y agoI don't know if you're aware but y2k was almost 30 years ago. My 2006 Corolla was going pretty strong up until a few years ago.
- adrianN 1y agoSo prices have roughly kept up with inflation?
- metaphor 1y agoNo[1], far from it in the US...thank goodness. [1] https://fred.stlouisfed.org/graph/?g=1KzKj https://fred.stlouisfed.org/graph/?g=1KzKj
- anon191928 1y agothat number is lie, good luck believing tho. printer will not share truth, it's always higher
- mrighele 1y agoAt least in Europe, car are more expensive to make than 20 years ago, even inflation adjusted, as the EU keeps adding new and stricter regulations. * Lower emissions, requiring more expensive engines. * Making cars easier to recycle (but more expensive to build) * Adding mandatory accessories for safety reasons. Here you can find an example of what that has been recently added. [1]. Nice stuff, but it doesn't come for free. [1] https://autovista24.autovistagroup.com/news/what-is-the-general-safety-regulation/ https://autovista24.autovistagroup.com/news/what-is-the-gene...
- morsch 1y agoCars have also gotten much bigger, heavier and more powerful.
- eptcyka 1y agoDifficult to make a small car that has all the safety and matches the price. It is easier to justify the bigger car at its price than the smaller car, since 2x bigger car will not be 2x more expensive to make.
- zihotki 1y agoThat's not the case in EU if we put EVs into separate category since they all have a battery weight toll.
- morsch 1y agoIt's true even if you don't consider EVs. People buy more SUVs, for one thing, but a 2025 VW Golf is also larger and heavier than a 2005 Golf, which is larger and heavier than a 1985 Golf. Compact cars in 2025 are the size mid size cars used to be a couple of decades ago. Meanwhile, the average family size is getting smaller and smaller and the average occupancy is ever closer to 1.
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- dmix 1y agoIt helps markets like US and Canada have essentially banned competition from Chinese car makers and tightly controlled automotive trade in general from many other countries.
- rafaelmn 1y agoEU also tariffed Chinese cars out of the market.
- vkou 1y agoIt's difficult to compete with automation.
- mjmas 1y agoOr slave labour
- newsclues 1y agoOr IP theft
- jaggs 1y agoYeah because the Western auto makers were developing advanced electric cars for decades before the Chinese started their program. Good catch. /s
- patrickhogan1 1y agoWe need to move past these debates or we’ll slip further behind. China is repeating Japan’s trajectory: early products may have been rough, but Toyota grew into an innovation powerhouse. No one questions the Prius’s impact today. At some point, we need to stop talking about what we did in high school 10 years ago and start figuring out how to make everything we interact with better by tapping into the collective intelligence of 8 billion people.
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- jandrewrogers 1y agoThey aren’t turning a profit on the hardware in many cases. They hope to make it up by selling financing and data from the platforms.
- arresin 1y agoI really don’t want my car to be a “platform”.
- charcircuit 1y agoNo one is forcing you to upgrade the trim on your car. That such an upgrade is available is beneficial. For something so expensive one would hope that it is extendable and you would not have to buy a whole new car if you wanted something different.
- rsynnott 1y agoAstonishingly, Stellantis (the global business, not the Chinese subsidiary) is profitable, somehow. Pays a dividend, and everything.
- v5v3 1y ago2024 revenue down 17% Net profit down 70% at a meagre 5billion. https://www.stellantis.com/en/news/press-releases/2025/february/full-year-2024-results https://www.stellantis.com/en/news/press-releases/2025/febru... They need to spend billions on an ongoing basis in R&D
- zihotki 1y agoPast performance is not indicative of current/future. See https://s3-prod.autonews.com/2024-09/Dealer%20letter%20to%20Stellantis%20CEO.pdf https://s3-prod.autonews.com/2024-09/Dealer%20letter%20to%20... for more details why it was profitable in previous few years.
- WhereIsTheTruth 1y agoWestern elites are finding out how bad of an idea it was to betray their own people for a quick buck, returning home will be difficult
- ako 1y agoAssuming you’re referring to CEOs outsourcing production to china to reduce costs? I doubt they had any real alternative with consumers always buying the cheapest option. Either move production overseas, or loose all sales to companies that do produce at lower cost. But you say, consumers don’t earn enough to buy locally produced products. True, but raising salaries won’t fix it, as it will make local manufacturing even more expensive. The whole system is not really sustainable.
- WhereIsTheTruth 1y agohttps://www.lemonde.fr/en/opinion/article/2024/04/17/the-exorbitant-pay-of-stellantis-ceo-carlos-tavares_6668695_23.html https://www.lemonde.fr/en/opinion/article/2024/04/17/the-exo... To end up going bankrupt with 1B in debts, the problem is elsewhere
- atom_arranger 1y agoTesla was built on American R&D and manufacturing and is competitive in terms of cost and features. It’s probably easier to not innovate and go for almost guaranteed short term profit by relocating existing manufacturing processes though. I don’t think there was no alternative. I think it was an easier, more short term, and more selfish (in relation to fellow countrymen and descendants), choice.
- ako 1y agoAnd tesla replaced many workers with automation to stay competitive, and also has factories in europe and china. I do think consumers have a responsibility here: for the last 30 years i've only had european cars. Even if they're a bit less advanced or a bit more expensive, it's a choice for a healthy local economy. Only the last car was a Tesla, as it seemed to be the best EV choice, but that will not happen again. Again, voting with my wallet, i will not sponsor the actions of a wanna be dictator.
- SV_BubbleTime 1y agoAutomotive EE here… If you would have gone back twenty years and been like “hey, you know how you think the Germans are running ChryslerDodgeJeep into the ground? … just wait until you see what the Italians do… and then the French right after that!!” I wouldn’t have believed it. Turns out the Germans really weren’t so bad. Honestly, Stellantis is making the wrong move at every turn and one possibility that makes sense is stripping the company… or some elaborate revenge plot… because it seems like they speedrunning destruction.
- senectus1 1y agohow much of this is China eating their lunch.. forcing them into poor decisions?
- FirmwareBurner 1y agoAnother (former)auto EE here. Their own poor decisions resulted in China eating their lunch. They couldn't stop shooting themselves in the foot, high on their own arrogance of European hundred year old industry superiority. Man, I wish I had a way to digitally export my memory of the townhall meeting in 2014 of a German luxury brand exec laughing on how bad Chinese EVs were. I bet, they aint laughing now, that's for sure. Germans and Italians had a multi decade lead on EV motors, battery, self driving and electronic tech over China (why I entered the industry) but they shelved it because they wanted to sell more diesel engines, outsourced all R&D to the lowest bidder to save costs and invest all profits into share buybacks or dividends instead of R&D (why I exited the industry). Are the German and Italian executives in charge of those decisions being held accountable for the mess they created, or are the enjoying a golden retirements/parachutes while thousands of workers are now being laid off and governments forced to spend taxpayer money to bail out their mistakes and rescue what's left to prevent further layoffs? What were the lavishly paid EU politicians and regulators watching over in that time? To me this is another nail in the western industry players falling victims to their own short sighted greed coffin. If only there have been any past examples in history to serve as cautionary tales, cough, Kodak, cough. /s
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- Animats 1y agoThis isn't a China problem. This is a Stellantis problem. Read the infamous letter from the organization of Stellantis dealers to the CEO.[1] That's from last September. The CEO was fired, but it didn't help much. What's left of Chrysler is one minivan line. That's it. [1] https://s3-prod.autonews.com/2024-09/Dealer%20letter%20to%20Stellantis%20CEO.pdf https://s3-prod.autonews.com/2024-09/Dealer%20letter%20to%20...
- mlsu 1y agoWhat is the 2023 mistake that he is referring to?
- Animats 1y agoThe usual thing when some finance guy is in charge. Cut costs, raise prices, increase short term profits, defer the collapse until later. The collapse came within a year. But for one year, Tavares was the highest paid CEO in automotive. Wikipedia: "Under the leadership of Tavares, Stellantis faced mounting criticism over its cost-cutting strategy, declining sales, and strained relationships with key stakeholders. Tavares implemented aggressive restructuring measures, including workforce reductions and tight control over product development, which some analysts blamed for delays in new model launches and weakening brand performance, particularly in North America.[45] U.S. dealers expressed concern about rising inventories and brand mismanagement, while the United Auto Workers criticized the company over job cuts and halted investment plans. Stellantis reported a 70% drop in net profit in 2024, with global shipments and U.S. market share declining significantly.[48] Amid internal friction with the board and worsening financial performance, Tavares resigned in December 2024, two years before his contract was set to expire."
- cchance 1y agoIt really is shocking how short sighted modern corporate infrastructure is, keep your employees and customers happy for the next 100 years and make a decent profit, naaaaa, makes a shitload and go out of business in 1-5 years now we're talking
- tibbydudeza 1y agoThe Silverado will save the business - the problem is more the Fiat side of the business - Peugeot still makes good stuff - they would have been better off merging with Renault.
- cyp0633 1y agoStellantis brands sales in China have been in decline long before the emergence of EVs. There is indeed some existence of Stellantis in China via Leapmotor (laugh).
- speedgoose 1y agoI am not an automotive industry advisor, but I guess this could have been avoided if the group strategy wasn’t about maximising short term profits and manufacturing mediocre cars.
- v5v3 1y agoThe West indicated to their companies that ICE cars were being phased out by 2030 and set incentives and penalties. (To complete with China ev). So the car companies rushed out EVs, panic spent on R&D. But without subsidies, most buyers didn't want them, as the charging infrastructure wasn't there (many people don't own garages or driveways or have 30 mins to sit in a charging point). Now the west is delaying their previous targets to ban ICE cars.
- speedgoose 1y agoChina has now a strong lead in EVs while Stellantis did the bare minimum by manufacturing bad EVs sharing a platform with fossil cars, and selling them at premium prices. I don’t know why Stellantis didn’t get the memo. Other car companies for sure did.
- eptcyka 1y agoVery rarely does one need to sit 30 minutes at a charger, without doing anything else.
- mattmaroon 1y agoIt’s irrational because what time you spend public charging you more than recoup by mostly just plugging in at home at night, but people don’t want to be forced to take an occasional 30 minute bathroom break.
- eptcyka 1y agoAnd all the time saved on oil changes. A polestar 2 has a service interval of 40’000km.
- rsynnott 1y agoI'm always a little shocked that Stellantis keeps going; it's pretty much a collection of all the car brands where, on seeing one, people go "wait, they still make those?!" That said, whatever about the Chinese subsidiary, it is, somehow, still profitable!
- yourusername 1y agoPSA (Peugeot/Citroen) seems viable. The rest does seem like a collection of car makers with a bad reputation and a limited/outdated model range.
- noiwillnot 1y agoFiat seems doing well in Southern Europe.
- vitorgrs 1y agoIn Brazil as well
- mattmaroon 1y agoRAM and Jeep are pretty strong brands in the US.
- wiether 1y agoI guess you are from the US? In Europe they probably make a quarter of the cars we see on the roads (Peugeot, Citroën, Opel, Fiat...)
- rsynnott 1y agoEurope, specifically Ireland. Very rarely see new Fiats or particularly Opels these days.
- wiether 1y agoInteresting! In France, Belgium, Spain, I see Fiat 500 everywhere (both the regular and the large version). IIRC, in the UK the Opel cars are sold under the Vauxhall brand: https://en.wikipedia.org/wiki/Vauxhall_Motors#Current_model_range https://en.wikipedia.org/wiki/Vauxhall_Motors#Current_model_...
- aussieguy1234 1y agoI guess this shows what happens if you're a car company and don't embrace new technology (electric cars specifically) fast enough.
- zihotki 1y ago3-4 years ago I was looking forward to the Stellantis's hybrid platform. These days I'm still looking forward... Constant supply issues (1), delays with release of new models, sky high prices, focus on luxury market section make Stellantis auto's hard to pick. Speaking from NL perspective, the market here is well saturated with EV. But a lot of people are hesitating to get one due to charging issues - you simply can't charge the auto if there is no charger on a street or they are not available. Electric grid is also very saturated in urban areas and electricity is one of the highest in EU (€ 0,32 per kWh including energy tax and 21% VAT for a consumer). For many people hybrids make more sense than EVs. (1) https://moparinsiders.com/stellantis-hybrid-push-triggers-production-delays-in-europe/ https://moparinsiders.com/stellantis-hybrid-push-triggers-pr...
- kungito 1y agoI just hope they sell off Alfa Romeo who knows what to do with the brand. Who the hell wants Alfa Romeo at BMW prices? The whole history has been selling affordable sport cars. They cancelled Giulietta and don't even plan on having a car in that segment. Tonale and Junior look horrible. The brand DNA all but died