Man…
Whenever I hear those words – I always prepare for the worst.
However, I need to stop doing that – because sometimes – buckling up is just for the safety’s sake…
Nothing bad is going to happen – we’re just going to have a rougher ride.
That doesn’t mean bad…
In fact, depending on what you’re riding in – that rough ride can be a lot of fun.
Of course, that doesn’t always bode well when it comes to the economy…
But that’s a different story.
No, today, we’re buckling up because we’re going on an adventure…
An adventure that only off-roading Jeep lovers can TRULY appreciate.
I bring up Jeep because this adventure deals with the company that owns this classic brand…
And where EXACTLY this adventure will take us – you’ll have to read to find out!
Let’s go!
All buckled in?
Good! Because the auto industry is about to take us on a wild and crazy ride.
Why?
Because carmaker Stellantis (STLA) recently reported strong financial results that beat estimates – sending Wall Street all abuzz.
Stellantis, the auto giant behind brands like Fiat, Peugeot, and Jeep, managed to turn last year’s supply shortages around and reported a healthy 14% revenue boost in the last quarter.
However…
On the other hand – its inventories has swelled to about 1.3 million cars – and the current economic outlook doesn’t look too promising.
As a result – demand for Stellantis’ vehicles is dwindling – especially in its biggest market: North America.
This has caused Stellantis’ average selling prices to drop in the region for the first time in a decade.
This could spell trouble for the company’s profit margins – and even Stellantis’ new share buyback program (worth almost $2 billion) couldn’t stop investors from speeding away.
Now…
why should you care about all of this?
Well, because other carmakers may be forced to continue slashing prices due to higher production and increased competition from Tesla.
Mid-range manufacturers seem to face the most risk now that Tesla’s price-cutting is snatching away their customers left and right.
Luxury car companies, on the other hand – can breathe a sigh of relief as Tesla shifts its focus down market – leaving the high rollers alone with their fancy cars and deep pockets.
Just look at Aston Martin, whose average selling prices soared 20% last quarter…
Or Porsche – who’s raising prices due to the red-hot demand for its fanciest models.
So, what’s the bigger picture?
Well, higher interest rates have been making it difficult for people to purchase cars…
But the Federal Reserve has hinted that the latest 0.25-percentage-point hike might be its final shot in its 14-month attack on inflation.
This could mean fewer potholes for drivers’ demand to slip into…
Which is great news for anyone who wants to buy a car without taking out a second mortgage.
The auto industry is a fascinating beast – and the competition is fierce.
Stellantis may be hitting some rough patches – but that’s what Jeeps were made for, right?
Will Stellantis be able to turn it around?
Maybe…
But there’s going to have to be some cost cutting happening if it wants to compete and lure investors back in.
We here at GorillaTrades LOVE this kind of profit opportunity…
You can bet I’ll be keeping my eye on Stellantis – and members of GorillaTrades will be the first to know if it’s time to hit the buy button if they start making headway!
We’d love for you to be there if it does…
That’s why I’m asking you to become a member today.
We understand if joining isn’t your “thing” – just keep in mind we’ll be here if you need us.
But keep your eye on the auto industry…
It could be in for a heck of a ride!
“You can have brilliant ideas, but if you can’t get them across, your ideas won’t get you anywhere.” – Lee Iacocca