‘Disaster Has Arrived’ At Stellantis As Dealers Call Out Damage Done To Brands
Good morning! It’s Friday, September 13, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
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1st Gear: Dealers Call Out ‘Rapid Degradation’ Of Stellantis
Jeep owner Stellantis is in crisis mode right now. It’s been hit with enormous recalls of its top-sellers, has seen profits plummet as sales stagnate and is even facing offers to offload some of its historic brands. Now, the automaker has been hit with a scathing review from U.S. dealers who say that “disaster has arrived” at the automaker.
In a letter addressed to company boss Carlos Tavares, dealers across America lay their disdain clear for all to see, according to a report from Automotive News. Dealers say Stellantis brands are facing “rapid degradation” thanks to “short-term decision making” that has shrunk the company’s market share and hit the Jeep, Ram, Dodge and Chrysler brands. As Automotive News reports:
“For over two years now, the U.S. Stellantis National Dealer Council has been sounding this alarm to your US executive team, warning them that the course you had set for Stellantis was going to be a disaster in the long run,” the group said in the letter. “A disaster not just for us, but for everyone involved — and now that disaster has arrived.”
Stellantis said it took exception to the letter and that it doesn’t believe public personal attacks are the most effective way to solve problems.
The company said it introduced an action plan in August that was developed with dealer input.
The plan, the company says, is already showing results. According to Stellantis, U.S. sales in August were up 21 percent over July, market share was up 0.7 points, and dealer inventory was reduced for two consecutive months by 42,000 units, or approximately 10 percent in total.
This isn’t the first time dealers across America have let Tavares know how they really feel, with dealers sending a letter earlier this year outlining issues they needed addressing. That letter was followed by a meeting with company bosses that led to a summer incentive campaign to support sales and more freedom to order certain models.
Now, dealerships across America are hoping for additional support to offload a swelling inventory and increased marketing to help sell more cars.
2nd Gear: U.S. Passes Law Cutting Support For Chinese EV Tech
Depending on who you ask, the biggest threat to America right now is either immigrants eating pets or Chinese EVs spying on us all and ruining good, honest, home-grown American business. While that first issue might not actually exist, lawmakers are convinced the second needs addressing so have passed a new bill that restricts support for electric vehicles made using tech from China.
Last night, the U.S. House of Representatives passed a bill that aims to tighten requirements around ties that American automakers have with Chinese businesses, reports the Detroit News. As part of this, the bill will restrict which electric vehicles qualify for the $7,500 federal tax credits available as part of the Inflation Reduction Act:
The bill, called the End Chinese Dominance of Electric Vehicles in America Act, was introduced by Republican West Virginia U.S. Rep. Carol Miller in April. It seeks to immediately stop EVs made using components or materials from any business with ties to China — specifically those with at least 25% ownership by a Chinese entity or individual — from receiving federal tax credits.
The restrictions on Chinese ties would cover licensing agreements, like the one Ford Motor Co. has with Chinese battery company Contemporary Amperex Technology Co. Ltd., or CATL, for a facility in Marshall. They would also apply to American-owned subsidiaries of Chinese companies, like the Gotion Inc. battery manufacturing facility planned for construction near Big Rapids in Mecosta County.
By limiting support offered to tech with Chinese origins, lawmakers are hoping that they can make the American auto industry more competitive on the global stage. However, opponents to the changes believe that support for all electric cars will only benefit everyone in the long run as EV adoption increases and automakers attempt to out-develop one another.
3rd Gear: Safety Regulators Probe More Than 3,000 VinFast Cars
It’s safe to say that VinFast’s launch into the American market has been far from smooth. There were terrible reviews for its cars when they first arrived and prices tumbled while it couldn’t shift cars. Now, the automaker is facing a safety probe into almost every car that it actually did manage to sell.
VinFast is facing a safety probe from the National Highway Traffic Safety Administration, reports Bloomberg. The investigation relates to the company’s lane-keeping tech and was launched following 14 reports of issues from owners across America:
The reports “allege the system has difficulty detecting lanes on the roadway, provides improper steering inputs, and is difficult to override by the driver,” the NHTSA said in a statement about the reported malfunction issue.
VinFast will cooperate fully with the NHTSA throughout this process, it said in response to a Bloomberg News query.
“We believe VinFast vehicles are safe,” it said in a statement on Thursday. “We take all safety concerns seriously and will continue to monitor the situation closely.”
The probe impacts 3,118 VinFast VF8 models manufactured in 2023 and 2024. The investigation may not necessarily lead to a recall of the affected models, but is the first stage in that process.
If you are worried that your car might be affected by a recall, there are a few easy ways to check. First up, the NHTSA has a super handy app that you can use to see if your vehicle is impacted by a recall, or you can head to the regulator’s website and plug your VIN into its recall search tool.
4th Gear: Why Is Nobody Buying The Electric Fiat 500?
While the U.S. is out here cutting support for some EVs, there’s one that definitely needs a bit of love: the electric Fiat 500. Thanks to slow sales for the cutesy EV, Stellantis has announced today that it’s slashing production of the city center runaround.
Fiat will pause production of the battery-powered 500 for four weeks, reports Reuters. The slowdown comes as a result of a “lack of orders” for the cute little EV, as well as a wider slowdown in uptake of electric models. As Reuters reports:
“The measure is necessary due to the current lack of orders linked to the deep difficulties experienced in the European electric (car) market by all producers, particularly the European ones,” Stellantis said in a statement.
The 500 is made in the northwestern Italian city of Turin, the birthplace of the Fiat brand, at the historic Mirafiori plant.
The suspension of production will start on Friday, Stellantis said, adding it was “working hard to manage at its best this hard phase of transition”.
Similar slowdowns have hit other EV plants in recent months, with Ford temporarily laying off workers at its F-150 Lightning plant earlier this year as it cut production. The move was followed by a pivot from the brand to focus on hybrid offerings.
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