The largest of the three major automakers had a successful year in 2024, driven by strong sales of its premium vehicles, including trucks, SUVs, and electric vehicles. GM shareholders enjoyed a 25% increase in stock value, supported by GM’s active share repurchase programs. GM announced a $6 billion accelerated share repurchase in June and had previously completed a $10 billion buyback in November 2023.
After gaining market share in Q3, GM entered the final quarter of the year in a strong position, with an inventory of approximately 627,000 vehicles and competitive incentives. The company is set to introduce new electric vehicles in 2025, such as the Cadillac Vistiq, Optiq, Escalade IQ, and Chevrolet Bolt EV. Despite these positive developments, concerns remain about the impact of potential changes to EV tax credits under the current administration.
Ford, GM’s rival, also had a successful sales year but faced challenges such as supplier issues and losses in its EV business. The company adjusted its profit outlook for 2024 and made strategic changes, including canceling a three-row EV SUV and delaying the opening of a new EV plant. Ford plans to focus on smaller EVs in the future, including a compact-style pickup.
Investors will be monitoring Ford’s progress closely, particularly regarding its EV business performance and cost management. The company will provide updates on these aspects in the first half of 2025. Stellantis, the third major automaker, also experienced a positive year, with successful sales of vehicles like the Jeep Wrangler 4Xe plug-in hybrids.
The situation at Stellantis is facing challenges with its portfolio including Dodge, Ram, Jeep, Chrysler, Fiat, and other brands. A management shake-up is underway, with a new CEO set to take charge in 2025 along with a revamped strategy for its vehicles. The company has been slow in its transition to electric vehicles, but plans are in place to integrate gas-powered cars with EVs on a shared platform.
Following a decline in sales and inventory buildup, Stellantis is working on lowering prices for existing models like Jeep SUVs and offering engine choices such as V6s and V8s to cater to customer preferences. New models are also in the pipeline, including the all-electric Dodge Charger Daytona, an electric version of the Jeep Wagoneer S, and the Ram 1500 Ramcharger range-extended hybrid pickup scheduled for 2025. Despite some improvements in inventory management, deeper issues remain, leading to a negative outlook from S&P ratings.
In contrast, Toyota is experiencing a successful year in the US market, with sales up and a significant increase in electrified vehicle sales driven by models like the Camry hybrids, RAV4 hybrid crossover, and the Prius. Toyota has introduced new models and updates, with plans for the new 4Runner with a hybrid powertrain in 2025 to cater to the demand for hybrids in the US market.
Looking ahead, Toyota faces potential competition from the merger of Honda and Nissan, which could pose a challenge in the future. On the other hand, Volkswagen is showcasing its ID.Buzz at the New York International Auto Show, highlighting its commitment to innovation in electric vehicles.
Germany’s Volkswagen (VWAGY), once a renowned entity in the country’s automotive sector and a former global leader in the field, faced significant challenges over the past year. The company’s performance in key markets such as Europe and China experienced a decline, exacerbated by issues relating to in-house software and electric vehicle (EV) development, leading to costly setbacks.
In Europe, Volkswagen narrowly avoided a major labor strike, but the underlying issues persist, contributing to the company’s overall difficulties. Meanwhile, the situation in China, a historically strong market for Volkswagen, shows no immediate signs of improvement, despite the introduction of a new joint venture partner.
Conversely, there have been positive developments in the US market, where Volkswagen has seen growth in sales of models such as the Atlas SUV, Tiguan crossover, and Jetta sedan. However, the company’s electric vehicle lineup has faced challenges, with sales of the ID.4 halving in the third quarter and the newly launched ID.Buzz van carrying a significant price tag of around $60,000.
One notable concern is the absence of hybrid offerings in the US market at present, a notable gap in Volkswagen’s product portfolio given the rising popularity of hybrid vehicles. Plans for introducing hybrid powertrains in key models like the Tiguan and Atlas have been delayed until at least 2026, posing potential risks considering their importance in the US market.
Despite these challenges, Volkswagen’s focus on electrification remains steadfast, with an emphasis on EVs in the coming years. However, the company’s current lineup has been recently updated, leaving few major launches planned for the near future. Looking ahead, Volkswagen’s strategic partnership with Scout Motors, a startup specializing in EV and hybrid adventure vehicles using Rivian technology, is a significant move that aims to bolster its presence in the evolving automotive landscape.
Nevertheless, the introduction of these new offerings is not expected until 2027 at the earliest, necessitating Volkswagen to rely on its existing product portfolio to navigate the market until then. The company faces the task of maintaining momentum and relevance in a rapidly changing industry, with a particular focus on meeting evolving consumer preferences and technological advancements.
Pras Subramanian, a reputable reporter for Yahoo Finance, provides insightful coverage of these developments and more in the financial and business sectors.
