GM’s ICE Commitment, Stellantis Pulls ICE Allocation, Student Debt Hits Back

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It’s a great week in Retail Auto to start the Summer. Today we’re talking about GM’s continued commitment to ICE vehicles. We also talk about Stellantis stopping ICE allocations of Wranglers, as well as the return of student debt payments to millions. 

Show Notes with links:

• In a move anticipating labor negotiations, General Motors commits over $2 billion towards the manufacturing of its next-generation, gasoline-powered pickups and SUVs, assuring their production into the 2030s.
  • The announcements came over the course of  seven-days this month
  • Next-generation Silverado and Sierra pickup production is expected to begin in 2027, with overhauled SUVs production following in 2028
  • "We want to find a solution that's good for our employees, good for the company, because we need to continue to reinvest," Barra said of union negotiations. "Right now, we've made some important announcements about reinvesting in these plants because I think job security is very important. To do that, the company has to be successful so we can continue to develop new products that customers want to buy."
  • Paul Waatti, manager of industry analysis at AutoPacific Inc, said "With all the headlines and focus on EVs and the surrounding investments, it's easy to think the transition is right around the corner," Waatti said. "The reality is, it's a decadeslong transition, not a yearslong, and nowhere is that more true than with full-size pickups and SUVs. They will definitely be among the last to go exclusively EV."
    
    
• Stellantis is no longer allocating gasoline-only vehicles to its dealerships in 14 states that follow California's emissions guidelines unless the vehicles have been ordered by customers. 
  • This strategy is happening ahead of CARB rules which do not require automakers to sell a specific percentage of zero-emission vehicles until 2026. States include: California, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Washington.
  • Brian Maas, president of the California New Car Dealers Association, commented on the issue: "People are going to go to Reno and Vegas and Phoenix to get ICE Wranglers, if that's what they want.
• As the U.S. government ends the suspension of student-loan payments in late August, close to 26.6 million Americans will start making monthly payments again. This shift is anticipated to collectively cost up to $10 billion per month, causing a likely contraction in discretionary spending. Retailers, especially within the apparel sector, may feel the brunt of this financial change.
  • These borrowers often shop at retailers such as Shein, Fashion Nova, Old Navy, Victoria’s Secret, Nike, and Lululemon.
  • Also, major retailers like Wayfair, Dick’s Sporting Goods, Ulta Beauty, Williams-Sonoma, Target, and Best Buy, have a high exposure to Millennials and Gen-X cons

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