The majority of automobile manufacturers in the world are experiencing a state of confusion, in the wake of successive crises, with the approaching date of US President-elect Donald Trump on January 20 next taking over the reins of power in the White House and his likely tariffs on imported goods, at a time when Nissan is on the verge of bankruptcy and a strike. Volkswagen and other pressures that excluded a few companies.
Stellantis Company
Analysts expect Stellantis, the owner of General Motors, Ford, and Chrysler – the fourth largest automaker in the world – to be among the companies most affected by Trump’s tariffs on imports from Mexico and Canada, according to what the Financial Times reported early this month.
On November 25, the president-elect wrote on the Truth Social social networking site that he would impose customs duties of 25% on all products imported from Mexico and Canada, and would raise duties on goods from China by 10%.
The threat facing America’s three largest automakers comes from the complex cross-border supply chains that the global auto industry has developed over the past four decades.
The British newspaper quoted Barclays analyst Dan Levy as saying: “It is generally understood that imposing comprehensive customs duties of 25% on any vehicles or content from Mexico or Canada could be devastating, but investors did not appreciate the extent of the damage this might cause.” .
Mexico and Canada are two of the most important manufacturing hubs for auto companies selling in the United States, which means that most of the world’s major manufacturers are vulnerable to the impact of tariffs.
On the other hand, Stellantis announced the immediate resignation of its CEO, Carlos Tavares, two years before his announced plans to retire.
The company stated in a statement that a temporary executive committee will take over the management of the company until a new CEO is appointed, which is expected in mid-2025.
Tavares was the first CEO of Stellantis since its creation in 2021 as a result of a merger between Fiat Chrysler and PSA Group.
Under the Stellantis umbrella, the company’s brands include Ram, Jeep, Dodge, Chrysler, Alfa Romeo, and Fiat, in addition to others.
The resignation came at a time when the company is facing major challenges, as its sales declined by 20% during the third quarter of 2024, compared to last year, and its share price declined by 40% from the previous year.
Nissan and bankruptcy
The Japanese company Nissan faces the risk of bankruptcy in the coming months if it is unable to secure its financial sustainability within a period ranging between 12 and 14 months, according to the company’s financial statements.
The company is suffering from declining sales in major markets such as China and the United States, which further complicates its financial situation, and in light of ongoing restructuring efforts, it is seeking to attract long-term investments to improve its cash flow.
According to Forbes magazine, the company’s plans to attract new investors indicate a strategic shift. Previous partnerships are no longer sufficient to achieve financial stability, especially with Renault, which began reducing its stake in Nissan years ago.
Among the options presented, Nissan is considering selling part of its stake through its French partner Renault, which may pave the way for possible cooperation with companies such as its Japanese competitor, Honda.
The name of Carlos Ghosn has returned to the forefront again. He is the former Nissan president, of Lebanese origin, who saved the company from bankruptcy at the end of the 1990s, before he was accused in 2018 of money embezzlement cases.
Ghosn, who was sentenced to prison in Japan, was able to escape from prison, where he currently resides in his country, Lebanon.
Volkswagen company
The day before yesterday, about 100,000 employees of Volkswagen participated in warning strikes, in protest against the cost-cutting plans that the German company intends to implement.
According to the metalworkers union IG Metal, these moves included 9 factories in Germany, to put pressure on Volkswagen management to back down from its plans, which include closing factories, reducing jobs, and reducing salaries. The company announced its intention to reduce employees’ wages by 10%.
These plans come at a time when the German company faces major challenges due to the slowdown in the electric car market, intense competition from Chinese companies, in addition to high costs of labor, energy and raw materials.
British suffering
UK car production fell for the eighth month in a row last October, intensifying pressure on the industry as it struggles with the transition to an electric future.
Figures from the Society of Motor Manufacturers and Traders (SMMT) showed that manufacturing production fell 15.3% in October to 77,484 units, resulting in a decline in production by a tenth so far this year.
The latest bleak figures for the manufacturing industry, which directly employs 198,000 people, come amid market turmoil after Vauxhall owner Stellantis plans to close its van production plant in Luton, putting up to 1,100 jobs at risk and blaming the government’s zero-emission vehicle mandate.
Tesla and BYD
In conjunction with this, the American electric car manufacturer Tesla is experiencing one of its best periods ever, as its market value grew last November by more than $300 billion, to settle near $1.1 trillion, driven by the strong alliance between its president, Elon Musk, and Trump.
In China, automobile companies there, led by BYD, are achieving historic and unprecedented sales numbers, despite European threats to impose customs tariffs of up to 45%.
Chinese brilliance
Car sales in China rose 11.2% in October from a year earlier, achieving the fastest monthly growth since last January, according to data from the China Passenger Car Association (CPCA).
Car sales in China, the largest car market in the world, reached about 2.28 million vehicles during October, bringing the total sales for the first ten months of the current year to 17.99 million cars, an increase of 3% over 2023.
Sales of electric and plug-in hybrid cars grew 56.7% compared to last year, constituting 52.5% of total sales in China during October.
This is the fourth time in a row that sales of electric cars exceed gasoline cars.
