Automakers in Panic Mode: Car Brands That Won't Survive 2026 | Episode 1019

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good. Prices and participation may vary. It's noon here in Ventura City, New Jersey,

and our nation's capital, Washington, D.C. This is CarEdge Live for Wednesday,

February 25th with your hosts, me, Ray, here in Ventura City, and Zach,

hanging out in front of his bike in his apartment in D.C. How are you today, handsome?

Doing well, Dad. Happy February 25th. Thank you, everyone, for tuning in and joining us.

Today's show is brought to you by CarEdge.com. Car site, show you frag prices. We'll get you

the real one for those of you that are unfamiliar. Yes. Six years ago, my dad and I started a car

buying service. You can get $200 off right now in CarEdge Pro, which is 20% off. We offer a service

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come on here and you can find dealers. Let's do, for example, I don't know,

browse by brand. Let's find a Ford dealer and we can find highly rated Ford dealers that

are transparent or I scroll down. Oh my, so many Ford dealers, Dad. So many Ford dealers.

We keep going. Some Ford dealers that maybe are a little less transparent. Like one, for example,

that 82, this explains what an outdoor price is. This one, Dad, that adds add-ons to 82% of

their dealer quotes. You can learn more about dealers. Get some insights here back on CarEdge.com

slash dealer dash ratings. We seek your input. You ready to jump into the show?

If I may, this information is based on verified outdoor quotes that our AI negotiating agent

has received on behalf of these customers. Would that be a correct statement, young man?

Yep. So to be clear here, you can click into every single, let's go back here. So we're on

Point Day Hills, Ford. We're saying that they have add-ons, et cetera, et cetera. I came down here.

This particular vehicle, a 2022 Ford Bronco, used one. It's got no add-ons, it says, but savings.

You can click through here. This one has add-ons. I can click through there. All of these have

the notes, have the receipt. So please, please, please. Yeah, what is this, Dad? It's got an

extra transport fee. This is crazy. What? Anyway, yeah, there's receipts for everything.

You also take a peek at that and share your feedback. Let's jump into today's show, Dad.

We're going to start here. Automakers are really, really, really starting to show some signs of

distress, and in particular, some luxury automakers. Aston Martin, Dad, this morning,

the story came out cutting one out of every five employees in their workforce at the same exact

time. Yes. All those sales plummet 23% year over year, and Lucid, Dad. Lucid has lost $2.7 billion

in the most recent year. Here are just three examples of automakers who may be saying goodbye

in the near future to the grand old auto market. Dad, let's start here with Aston Martin.

20% of their workforce cut. This is a big deal. Well, it's a big deal if you happen to work

for Aston Martin, and if you don't, well, then it's not. You're thinking to yourself,

who cares? But you should care, and the reason you should care is if luxury brands are struggling

and some of the luxury brands are, and Aston Martin is one of those brands, and we know that

the vehicles that are selling presently are, well, luxury brands, then you have to start

thinking to yourself, is this all drying up? If Aston Martin goes by the wayside,

could that impact Mercedes? Could it impact BMW? Could it impact all the other major luxury

brands that are out there? It very well could. Now, let's face it, Aston Martin makes a pretty

damn good-looking car, but it's not one I would ever own. It's not one I ever said to myself,

well, I shouldn't say that because there have been times where I said to myself,

you know, I pretty good in one of those convertibles that they make. But the point is,

they're so damn expensive, I would never actually dream of doing it. But if you are

cutting out the high-end luxury customers, if they are finally begging off and saying

enough is enough, that should be a warning sign for everybody.

Yeah, it's not a little bit of the story here. Think of some of the brands that we've talked

about recently that are in financial hardship. Obviously, I just brought up three that are

all luxury brands. We brought up Aston Martin, Volvo, Lucid. There's also Maserati, Dad. Maserati,

Alfa Romeo. There are a handful of Silanthus-related brands there that are really struggling from a

sales perspective, profitability perspective. There could be a whole litany of luxury brands that

go by the wayside that go out of business. And to your point, seeing luxury brands go out of

business. Heck, we haven't even talked about Lincoln. Lincoln struggled mightily as well.

Part of that's due to quality issues and all sorts of stop sales last year. But

that if luxury brands are going out of business, that's an indication that, yeah,

those well-heeled high-end buyers are no longer purchasing. And that's where this industry has

found itself finding their most profitable customers are at the highest ends. If that goes away,

that would get that quick. What you have to realize is we're also seeing

non-luxury mass market brands struggle. Mitsubishi, Nissan. Yes. I mean, Nissan in particular

closed seven of the worldwide manufacturing facilities because they were being underutilized.

They're selling off real estate so that they can have the cash on hand to keep operating as a

business. So you're looking at one of the world's greatest mass market brands that for the most

part produces some relatively inexpensive new cars. They're struggling. Then you look at a

lot of your luxury brands. They're struggling. Well, who's left? At some point, everybody's

going to struggle. And we can't just always blame it on China because even some sales in China

are struggling, where the government has said you can no longer continue to just lower the

price of your vehicles and sell everything at a loss and expect us to continue to support you so

that you can stay in business. So it seems like there's a worldwide reckoning, an awakening that's

happening where every brand, mass market, luxury, whatever is starting to look at the issues

surrounding their businesses and wondering just how many more years do they have left?

Yeah, seriously. All right. So let's turn our attention to because even the Volvo's story

starts to speak to what you're talking about, which is, be clear, Volvo is a luxury brand,

but this is their stripped down EX30 that they're bringing to market to try

and revitalize sales. So Volvo sales down 23% globally, and that's a huge decline obviously

for the manufacturer, they're coming into the market now with a cheaper mid $30,000,

low $30,000 variant, the EX30, that's their big bet here is that this little thing is actually

going to be what drives future growth for Volvo. Now the challenge here, dad,

is this is an electric vehicle and we know that that's not really what people are looking to

buy right now. So it seems like even these manufacturers, so luxury manufacturer Volvo,

trying to bring prices down to appeal to a wider audience, we've seen other manufacturers

at Nissan that to be she struggle even at lower price points, while they're bringing in a new EV

at a lower price point, is that really what's going to set them up for success or is this going

to be another death nail on the path towards potential going out of business?

Well, and Volvo is, even though it has Swedish heritage, it's a Chinese company these days

and it has been for a number of years, yearly automotive, bought them years ago from Tata,

which was an India automobile manufacturer. So, you know, everybody has struggled with Volvo.

Has it always been considered a one of the world's safest cars? Yeah, but how long can you

live off of that reputation? And is it, did they go so upscale that they actually became a luxury

brand? I think they got into luxury pricing whether or not they were actually considered a luxury

brand is another question and probably another show. But it is scary when a brand that has been

around as long as they have with a reputation for safety as long as they have is now struggling

to find their footing and find a place in worldwide automotive. And it's, you know,

how small do you have to make that electric car to where people are willing to buy it?

And it seems as if even that small, and in the mid 30s or lower 30s, people still don't want to buy

it. So, I don't know what the answer is for some of these brands. It is frightening to a certain

degree in the sense that we can see a major shake up in what automotive looks like 10 or 15

years from now as far as who the big players are. Yeah, and I don't even know if it's 10 or 15 years.

I mean, the reason Stellantis is now called Stellantis is because there's a merger of a bunch of

brands, many of them obviously struggling. We're seeing the ramifications of that now.

So maybe, dad, maybe the future looks like the Lucid, the Tesla, the Rivians of the world.

Well, that's where we get the latest Lucid data. Yeah, they lost $150,000 per car sold

last year, per car made last year. I mean, they are just losing money hand over fist.

I think about this, the startups we've known have been losing money for a long time,

used at Rivian, et cetera. And they continue to lose money today. Now the legacy automakers

are also losing money hand over fist at the same exact time. This is a little one-two punch,

Lucid losing all this money, Rivian losing all this money, Volvo losing this money,

Aston Martin losing this money, Nissan, the list goes on and on. They're all losing money right now.

And some of them are going to go out of business. And you look at Lucid and you think to yourself,

well, the fact that they're only losing $150,000 per vehicle sold, okay?

Well, that's a significant improvement over when it was a quarter of a million dollars

per vehicle sold. My suggestion to the good folks at Lucid and your headquartered in Casa Grande,

Arizona, not too far down the road from Tempe, Arizona, you know, maybe it's time to bring up the

Garcia's father and son and say, hey, how do you turn this stuff around? Because nobody,

nobody has done a better job of that, at least on paper than Carvana. So, you know, if you want to,

if you're Lucid and you're looking at what the future may hold you, you have to just travel up

the road a little ways and go, please show us how to go from zero, from nothing, from near

bankruptcy to a hugely profitable and investor-led company. So, please help us because at a certain

point, even the Saudis are going to say to Lucid, you know what? We're done. I mean, how much can

you, and I know that, hey, the Saudis are still making a ton of money off of oil. I get all

that and they're hedging their bets and putting billions upon billions upon billions into propping

up a small electric vehicle manufacturer, in case the world goes to the root of battery electric

vehicle, then if they have a good year next year, next year, this year, 2026, if they have a good

year, they're going to sell 25, 26,000 vehicles. There's a certain amount of lunacy associated with

that, at least in my mind. Now, it's not just the small guys, right? We started the show talking

about a legacy brand with Aston Martin, Volvo, obviously struggling. He brought up Nissan

and Mitsubishi as well. Yeah, this is across every brand. I brought up Maserati and Alfa Romeo.

Even this headline today in automotive news speaks volumes of what's going on in the

auto industry right now. Audi, as part of a legal case, which we're going to talk

about in a second. This closes, it expects US sales to slump into 2026. That is part of a

legal dispute with a dealer group. It came out in part of the discovery that Audi expects a 13%

sales drop this year in the United States. Just another indication of, yeah.

Just between you and me and the 10 or 12 people that might watch this. You were the

National Automobile Dealers Association meeting in Vegas earlier this month.

Do you think at the Audi Make meeting that the executives from Audi stood up and said,

hey, by the way, great news. We expect sales to decline 13% for you this year. I'm pretty sure

they put on a much happier face and expressed how sales were going to increase in 2026

to pump up their dealer body when in reality, their lawyers in a legal case have to admit

the truth, which is we're actually expecting sales to decline this year. One of the reasons

I never liked going to things like an ADA or even the dealer meetings that I was expected to attend

was because these meetings are set up where the manufacturer is just trying to blow smoke up your

butt. For what it's worth that, I want to be very clear. I do not attend any manufacturer

meetings. Well, I know, but our audience might not. I have no clue what they talked about.

The report here that we have comes out of a lawsuit. Yes. I think you're trying to draw a

connection here, which more power too. You were the one who sat in on these meetings for a 40-plus

year career where you're saying the manufacturer is going to say, hey, things are hunky-dory,

but in reality, they're not. But let me show you here, Dad, because it is fascinating how

we got this information. There is a dealership group right here. It's Luxury Autos of

Smithtown, which operates Audi of Smithtown in St. James and Audi of Huntington and Huntington

Station on New York's Long Island. They're in this legal battle with Audi. They're in this

legal battle because they've said that they were wrongfully disadvantaged by Audi of America's

margin programs tied to sales. Now, it's worth mentioning here that my dad, for a period of

time, ran an Audi dealership. We're going to get his insights in just a second. But as

part of this dispute, legal dispute, Audi came out and they said their sales projection for

2026 is 144,000 vehicles, which should be clear as a 13% decline. Audi, Dad, had hit record-setting

sales back in 2023, and sales have fallen by double digits in 2024 and 2025, and they're

expecting that to happen again here in 2026. To fit the theme of automakers in panic mode,

car brands that won't survive in 2026. Will Audi survive in 2026? Of course,

Audi's going to survive in 2026. Aston Martin, Lucid, on the other hand,

I think they're a little more teetering on the edge of jaguar. Yeah, jaguar. Yep. There's some more

brands that are on the potential peril in 2026 timeline, but Audi three years in a row of over

10% sales declines. Dad, that program that these dealers were saying they were disadvantaged in,

I mean, you sold Audi's for a long time. Audi's a manufacturer that offers big stair step

programs for hitting volume. You've shared the story and I'll give you the space to

share it here in a second. Again, no one sells Audi's at MSRP. No one sells Audi's at

Invoice. They all sell back of Invoice. This is interesting data to get our hands on.

When the people I worked for bought an Audi dealership, an existing Audi dealership,

and they approached it the way they approached all their stores, which is they didn't really

like to discount. I remember at the mini store, they said, I don't think we should be

discounting our vehicles. I said, well, you need to tell that to our competitors because they are.

And after we had taken over the Audi store, the Audi rep came in and looking at the monthly

financial statements said, your accounting department must be off. You're making like

two and a half to three times the profit per vehicle sold than any other Audi store in our

region. And so you must be accounting for this incorrectly. And it was, well, no, they weren't.

We were making money per every car sold, where in the region, the truth of the matter was that

the vast majority of Audi dealerships, if not all of them, sold every vehicle below Invoice.

And the rationale for it was there were stair step programs from Audi for hitting your sales

numbers, for hitting service targets, for hitting customer satisfaction targets and things like that,

where Audi was the one that was paying the dealer's profit, not the customer's. They didn't,

Audi did not expect the customer to actually be the one that was paying the profit so a

dealership could stay open. Audi was going to pay that. And so it was hard for our group to grasp that.

But dad, look at this litigation going on right now. This is a dealer group saying we were

disadvantaged and Audi coming up. And Audi's coming out and saying, yeah, you're disadvantaged,

we're disadvantaged, we're down. Look at this, just for context here. Audi's sales are going to

be down 37% from their all time high, which was just three years ago. So think about that

for a second. Think about that. Audi sales down 37%. At the same time, dad, they're competitors.

Ben's BMW are anticipating and projecting sales growth this year. So not only is the dealer

saying we're being disadvantaged in a program that, as you're describing it, doesn't allow

them to make money from selling cars, they make money from Audi funding it on the other side,

the Audi is also coming out and saying, we got no chance of actually selling more vehicles,

we're anticipating we're going to sell 37% fewer than our record.

Yeah, they have been trending in the wrong direction for several years now and there doesn't

appear to be anything that is going to put a stop to that. They tried their best to

really go into electric vehicles, much more so than many of their competitors, and that's come

back to bite them. And then the cost of their vehicles continues to go up. And truth of the

matter is, Zach, the quality of their vehicles is suspected best, you know, in my mind.

And Audi is no different than Mercedes-Benz or a BMW.

They're trying to cheat in that same range.

Yeah, in the sense that you wouldn't want to own one once it is out of warranty.

The cost of maintaining one and repairing one when the stuff starts breaking down

is astronomical. And so that's another issue that they have to address because

they do have as nice of vehicles they build. And they, you know, when they're brand new,

they are, they're beautiful. They're magnificent automobiles. But it's what happens to them when

you use them. And then what it takes to maintain them, I don't know how anyone could own an Audi,

a BMW or Mercedes-Benz out of warranty. I mean, you just, you might as well just give the dealership

your checkbook and tell them the right, whatever size check they need to write every month so that

you can continue to drive your car. I will say, when we're talking about these luxury German

vehicles, I feel like that's across the board, some obviously, and it goes down to a model

level to some worse than others. But these vehicles are obviously very expensive from a

cost of ownership standpoint. Dad, I want to turn our attention to one more story here,

which is Lincoln. They're reportedly going to come out with an upgraded Bronco to compete with the

Mercedes G-Class. What? Excuse me. What was that? Could you write that to me again?

Lincoln wants to compete with the G-Class, the G-Wagon. And everyone wants to, BMW, Audi,

and L-Lincoln. So this is going to be a re-skinned upgraded Ford Bronco that'll probably cost you

well over six failures. They're G-Wagon competitor. This could be the path of

profitability over at Lincoln. I believe that every potential Lincoln owner has said,

boy, if they just made something that was along the lines of a G-Wagon, I'd be in.

And I guess the fastest way to get there is to take a Bronco and re-skin it and just make it

even boxier. It seems to me that that will probably be a losing proposition on behalf of the good folks

at Lincoln. They're showing up market. This is another example of going up market amidst the

time when we know that that strategy is starting to show some cracks. Ford already has expensive

vehicles that they're struggling with. And then Lincoln's been struggling for years. I mean,

if ever there should be a dual franchise, it should be like Lincoln, Audi, all in one facility.

And that way you could end up closing your store sooner rather than later because it'll fail

faster. It just seems to me. Well, think about it. I mean, there was a point in time where there was

Ford and there was Lincoln and Mercury. And then Ford said, well, Mercury's not doing nothing.

So let's do away with Mercury. At a certain point, they're going to come to the realization,

well, that Lincoln's not doing anything. And it's, you know, just stop already. I mean, why are you

wasting the money? Why are you wasting the time? Put that time, effort, energy and money into

more affordable vehicles so that you can broaden your customer base. But to suddenly think to

yourself, damn, we need something to compete with the G-Wagon. It reminds me of we were driving around

the other day when you were here. And we saw an X6, a BMW X6. And I said to you, I said,

look at that. That's the vehicle that Acura said we need to make a competitive model to that,

which was at that time the original gas-powered ZDX. And, you know, I thought to myself, every

time I've seen an X6, I think, that's really a pretty interesting looking vehicle. It's really

unique. And then when Acura actually came out with the ZDX, I thought to myself, well, the

problem with this is that in reality, I might see an X6 every six months. Okay. So, yeah, they're

pretty interesting looking. They just don't really sell a lot of them. And so to suddenly say, well,

we need a competitor to that, is that that's the same to me when Lincoln says we need a competitor

to the G-Wagon. No, you don't. You know, let Land Rover be a competitor to the G-Wagon. You don't need

to try and be a competitor to the G-Wagon. I mean, if you want to produce something that isn't

going to sell, then okay, decide to be the competitor to the G-Wagon. And you'll realize

afterwards, you know, people buy the G-Wagon. Of course, it's a G-Wagon, damn it. Not because

it's a reskinned Bronco. Let's come here to the chat, Pops. We had earlier in the show from Rich.

Thank you for your kind contribution, Rich. Pops, the realist. How many years will it take to

clean up this still growing mess? And this is tying back to obviously some of the conversation

there with Lincoln, but more broadly, these automakers that are in panic mode, that are

doing mass layoffs, that are anticipating major sales cutbacks, et cetera. How long to clean up

this mess, Ed? Oh, I think I mentioned it yesterday. I really think that the landscape of automotive

is going to look so completely different 10, 15, 20 years from now, that the major players

and the major manufacturers aren't even manufacturers or players that we know of today.

I think there's going to be some startups out there that really make inroads. And I think

we are looking at the first indications, or maybe for me it's the realization that there

have been indicators for years that legacy major automotive manufacturers, as we know them,

are going by the wayside. They are so entrenched in what they do that they no longer have the

capability to maneuver as quickly as they may need to maneuver in order to be able to stay in business.

So how many years? I don't know. I think automotive is going to look completely different 10,

15, 20 years from now. I think the brands that you will be discussing, thankfully I won't

be doing this anymore, but I believe the brands that you will be discussing with whoever your

co-host may be will be brands that we would have never really thought of as being the major

players. I've lived through just in my lifetime brands that were out there that you don't see

anymore, Rambler, which became AMC, Studebaker, Etzel. I mean, there are so many brands that

existed that don't exist anymore that I think the future will be, you will be discussing brands

that nobody thought of would ever really be major players. So 15, 20 years?

Dad, Cox Automotive actually came out with a really interesting survey they did, which was brand

awareness and familiarity for Chinese automakers. And it could be some of these names that I'm about

to read to you that become what we're talking about in the next decade. BYD, many people have

heard of that. Shang-Yan, Cherry, Geely, JTor. Apologies if I'm pronouncing these incorrectly,

but these can be the brands that we're talking about in the decade that now have

market share, mind share, et cetera. Just like you were describing, Rambler went away,

Studebaker went away, Saturn went away. Yeah, C went away. I mean, there's just, you know,

let me know when Feng Shui comes out with a car. Okay, because I got to get my Feng Shui on.

I'm trying to be good. Again, folks, today's show is brought to you by CarEdge.com. If you

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folks, we've saved people over $20.5 million across 50,000 AI dealer outreaches. You can

see here every day how that number is growing. And the data that we then make, excuse me,

we make available and provide are things like brand report cards, state B reports,

or you can simply come here and search for a dealership near you. So I'll just search for

Nissan of Merrimack Valley. There you go. You can see here what their dock fee is. I can scroll down

and I can see quotes for vehicles that we've gotten from that particular dealership. So

all the notes are here. Whoops, failed to fetch the PDF. This is why it's in beta, baby. Let's

see this one. Failed to fetch beta, gal log beta. I hate when it fails to fetch, buddy.

I mean, that's like a three legged dog, you know, that just fails to fetch.

I love that. But you can see there's really good information here. I can sort, for example,

by C rated Nissan dealers. Let's go to Jacksonville and let's take a peek at some deals here.

There we go. Nice. We got our Windows sticker. We've got our OTD quote. Let me show the right

tab. You can see the Windows sticker here. You can see the OTD quotes. You can see the

pre-delivery service charge. What's this dealer deal one? Come on. Yeah. Anyway, y'all, we've got

great data back on caredge.com slash dealer dash ratings and we want your feedback, please.

Absolutely. And we need your feedback. We need your feedback. Yes. Yes. Okay. We're back tomorrow

with more Car Edge Live. Please tune in at 12 p.m. Eastern 9 a.m. Pacific time. Dad,

enjoy the afternoon and talk to you soon. Absolutely. Yeah. I mean, me and the grocery

store, we're going to have a good time today. If you're the purchasing manager at a manufacturing

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Automakers in Panic Mode: Car Brands That Won't Survive 2026 | Episode 1019

About this episode

CarEdge.com

Ford Bronco

transport fee

Aston Martin

Lucid

luxury brands

Volvo

Alfa Romeo

Maserati

Lincoln

Nissan

Mitsubishi

mass market brands

selling vehicles at a loss

electric car

Stellantis

Rivian

sales drop

National Automobile Dealers Association

dealership margin programs

sales projection

sales decline

Jaguar

Volume sales programs

Back of invoice

electric vehicles

out of warranty

Mercedes-Benz Gclass

G-Class Gwagon

re-skinning

Acura ZDX

Land Rover

Request an Explanation

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