Look below the surface, and there are hints that bad times could be in the works for the auto industry. Trade wars are afoot. Cars are moving toward simpler, electrified powertrains. Automotive sales seem to be declining. The automotive world is hitting a transition period — and as we’ve seen in the past, transitions in the automotive world can be painful.
The Great Recession and its aftermath saw the demise of popular brands like Saab and Hummer, and brought others right to the brink. What trouble will the next downturn bring — and who will it bring trouble to? No one knows. But based on what we know so far, we’ve put together a list of six automotive marques that could find themselves in serious trouble over the next decade.
Fiat-Chrysler has done a great job creating specialized brands for its offerings. Dodge does the performance cars. Ram does trucks. Jeep does SUVs (and now, smaller trucks). But that has left little room for the Chrysler marque itself. There are currently only two “Chrysler” vehicles on offer: the aging 300 sedan, whose sales are down 39 percent in 2019, and the Pacifica minivan, which has seen sales drop 29 percent.
Yes, Chrysler still has a social media presence touting that #vanlife on a daily basis. But there’s no clear route to revive the marque. Times are tough for sedan-based, lower-tier luxury brands.
Maserati faces an ever-present conundrum: Its brand is too well known to cast aside, particularly in America — but the company’s vehices are too niche to be worth overhauling. Exciting concepts take forever to go into production. Ferrari has kept Maserati on life support with an engine-supplier deal since 2002, but Maranello plans to sever the cord early next decade to focus on its own production cars.
That leaves Maserati…well, it’s not clear where, exactly. Cribbing engines from Alfa Romeo? Launching an SRT Hellcat Quattroporte? There’s no obvious route forward with FCA as the company’s currently constituted. Even with Ferrari’s help, Maserati sales dropped by 28 percent in 2018….and the first quarter of 2019 was even worse.
Cool Britannia comes in phases. BMW cashed in with the Mini sub-brand in the early 2000s, but the nostalgia train has since moved on. Americans have stopped buying small cars. Sales for the classic two-door hardtop Mini are about a third of what they were 10 years ago. Mini has largely become a quirkily-styled SUV company, led by the Countryman — whose sales are down 35 percent year over year in 2019.
BMW reportedly has been considering closing Mini dealerships. The sub-brand will get two more pushes, with an electric Mini coming soon and the John Cooper Works cars scoring more power to compete with the Honda Civic Type R and the VW Golf R. But if the tech becomes more of a selling point than the retro styling, why wouldn’t people just buy a BMW instead?
Tesla has the best EV tech on the market. The Model 3 was the best-selling luxury vehicle in the U.S. in 2018. Yet that success has not stabilized the company: Tesla lost $702 million over the first quarter of 2019, while major investors are dumping Tesla stock, which has fallen more than 40 percent (as of this writing) since December 2018.
Tesla has responded frenetically. Business plans and pricing have changed by the week. The company has barreled forward announcing new models and sweeping plans, such as converting its privately-held luxury vehicle roster into a taxi service.
With Porsche, Mercedes, and other companies quickly catching up with Tesla on EV tech, the company’s fate rests on a dramatic bet that they are right and every other manufacturer is wrong on a quick roll out of full automation.
After decades at the top of the category, Cadillac lost its luxury market share in the 1980s and 1990s. Their cars underwhelmed, and competition from the likes of BMW and Lexus increased dramatically. Since then, the brand has struggled to find a new message. Building a strong performance sedan lineup starting in the 2000s seemed like a decent gambit…until Americans stopped buying sedans.
Now, Cadillac is attempting to belatedly move further into a crowded luxury SUV space (without offering much innovation) and roll out a less powerful “V Series” to expand the sub-brand’s appeal A move to become a luxury EV brand in the early 2020s will be, by GM’s own admission, Cadillac’s last shot.
Bentley’s place within Volkswagen AG’s future may be perilous. On the surface, Bentley seems better suited than a brand like Lamborghini to share engines and platforms; the Bentley brand is all about classic British luxury style, and fine wood and leather over Porsche-derived mechanicals is not a bad combination. The troublesome part for Bentley: the brand’s aristocratic veneer isn’t always translating to profits. At a time when Volkswagen is looking to cut costs, Bentley has been losing money on every vehicle it sells…and has received a cryptic ultimatum about profitability during the next couple of years.
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