Wanna make more money for your car brand? Make more cars. That seems pretty obvious advice, but it might not be the best advice. While some automakers clearly believe thatreally is the way to grow their bank balances, others take a different tack, focusing on making cars with big profit margins.
That comparison is made by Brian Finkelmeyer, an industry analyst at Cox Automotive, who contrasts the fortunes of the Hyundai Group of companies with Stellantis, two organizations with opposing strategies. Finkelmeyer likens Hyundai to GM in the 1960s when The General’s brands collectively held a 50 percent market share thanks to smart application of platform and engineering sharing principles. Obviously Hyundai doesn’t have close to that kind of market share, but it is growing its share and has posted an 11 percent sales increase since 2019.
So despite the two groups’ overall U.S. sales volumes for 2022 being broadly similar, how did Stellantis generate over $30 billion more in U.S. revenue than Hyundai? The answer is that Stellantis has abandoned a pursuit of market share for a pursuit of profit, a strategy that has resulted in Stellantis focusing on bigger vehicles from the Jeep and Ram brands with bigger price tags and bigger profit margins.
Stellantis’s tactics, which Finkelmeyer says adheres to the industry maxim ‘volume for vanity, profit for sanity,’ can be traced to former Fiat-Chrysler-Automobile boss, the late Sergio Marchionne, who canned the Dodge Dart and Chrysler 200. And while Dodge is now re-entering the small car market with the Hornet, a potential transaction price ofadvertisement scroll to continueexplains that there’s more to the story than simply headline profit figures.
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