In the automotive industry, the sequence of vehicles to be produced is determined ahead of the production day. However, there are some vehicles, failed vehicles, that cannot be produced due to some reasons such as material shortage or paint failure. These vehicles are pulled out of the sequence, and the vehicles in the succeeding positions are moved forward, potentially resulting in challenges for logistics or other scheduling concerns. This paper proposes a two-stage stochastic program for the mixed-model sequencing (MMS) problem with stochastic product failures, and provides improvements to the second-stage problem. To tackle the exponential number of scenarios, we employ the sample average approximation approach and two solution methodologies. On one hand, we develop an L-shaped decomposition-based algorithm, where the computational experiments show its superiority over solving the extensive equivalent formulation with an off-the-shelf solver. Moreover, we provide a tabu search algorithm in addition to a greedy heuristic to tackle case study instances inspired by our car manufacturer partner. Numerical experiments show that the proposed solution methodologies generate high-quality solutions by utilizing a sample of scenarios. Particularly, a robust sequence that is generated by considering car failures can decrease the expected work overload by more than 20% for both small- and large-sized instances. •A two-stage stochastic program for a mixed-model sequencing problem with product failures is presented.•Considering stochastic product failures improves the robustness of planning.•An L-shaped decomposition-based algorithm that outperforms off-the-shelf-solvers is presented.•A greedy heuristic and an accelerated tabu search algorithm are provided to tackle industry-sized instances.•Expected work overloads can be reduced by over 20%, utilizing the proposed solution methodologies.