Some Automakers Are Imploding. Here’s What’s Happening
The month of July looks like Hell for a number of vaunted automakers. While all companies are seeing a downturn from slumping sales, a number of them have seen disastrous drops in profits for the first half of 2019. Let’s start with Aston Martin.
With the whole Brexit deal being a giant black hole of unknowns, it’s hurting many UK companies. Aston Martin is reporting a $96 million loss for the first half of 2019. Consequently, its stock price has tanked, falling to its lowest level ever. From an initial £19, its price is now sitting below £5. Shares are down 17%. Don’t forget that Aston Martin is a low volume manufacturer selling only 7,000 cars annually. Expect that number to be cut back while it works to stop the bleeding, continues to explore electrification, and ramps up production of the all-new DBX crossover.
Nissan’s crazy internal problems have exposed its lax product development, resulting in aging and generally poor selling cars. Nissan announced a decrease in first-quarter net income of 94.5-percent. In other words, there was essentially zero profit for first-quarter 2019. Nissan had to respond.
With the announcement that it’s cutting 12,500 jobs come plans to kill off 10% of its model lineup. Some are obvious candidates. The Rogue hybrid is first on the chopping block, but there will be more. While we love the 370Z, it hasn’t changed in over a decade. It has seen mostly “special editions” short on actual updates and refreshes. We keep hearing about new Z development, but with the continuing rise in trucks and SUVs, the Z may become a victim. As it stands, Nissan is killing off the 370Z roadster for 2020.
The Maxima had a bad year in 2018 selling less than 43,000, and 2019 is looking a lot worse. It’s hard to justify its existence when Murano and Altima sales are so much stronger. Mating a big V6 to CVT hasn’t helped. Look for Maxima to get the ax-ima.
Infiniti Q70/Q70L sedans are old. They’ve become poor sellers partly as a result. We won’t be surprised to see them killed off. Just 4,479 Q70 models found buyers in 2018.
Though many auto manufacturers are seeing sales fall BMWs ills are more systemic. For over a decade it’s ridden a wave of profit. Not so for 2019. Fines of over $1.6 billion imposed by Europe and China over the release of new emissions technology are just the start. BMW also posted a 42-percent drop in earnings first quarter of 2019.
Like Nissan, BMW plans on killing off poor sellers while stepping up the release of new models like the upcoming 3 Series. Part of the problem may stem from the development costs for its bevy of new releases like the Z4, X7, and the 8 Series family.
BMW is predicting a strong second half of the year, so things may soon shine again for the German automaker. Let’s hope.
Diesel shenanigans have plagued not only Volkswagen but also Mercedes-Benz. It posted a Q2 loss of $1.3 billion, Mercedes’ first quarterly loss since 2009. Part of the reason is the recent emissions scandals, but also a huge investment in EVs and autonomous technology. Q1 sales fell seven-percent as Mercedes faced manufacturing glitches with GLE, A-Class, and van production.
Mercedes has announced plans to reduce the number of models it sells, which should be no surprise. With so many models and variants trying to appeal to all price points and niches, model lines have become blurred. It’s already announced the SLC Roadster will not continue production. Look for C- E- and S-Class coupes and convertibles to be next, as well as some AMG variants.