Stellantis was balancing between record profits and profits. Their brands now have “two to three years” to survive.

In 2020, as the world grappled with the Covid-19 pandemic, FCA and PSA unveiled the name of their merger. Stellantis, the largest automobile conglomerate in the world, was born.

With 14 brands under its umbrella and a gigantic market share (almost half in countries such as France or Italy), it was then a difficult task to deliver such a liner to port. The task was entrusted to Carlos Tavares, who became CEO of the new company and took decisive action.

First of all, this is non-negotiable. reduce production costs. It was necessary to produce new platforms that would allow the production of a large number of cars by using the maximum possible number of elements. Thus, we have seen the new Peugeot e-208, Lancia Ypsilon or Opel Corsa e appear on the market. And also how this formula was repeated with the Peugeot 2008, Jeep Avenger, Alfa Romeo Junior or Abarth 600e.

Launches have also been made from multi-energy platforms to try to play in all areas: hybrids, plug-in hybrids and electric vehicles. Sell, sell and sell at the lowest possible price. This has always been the principle of Carlos Tavares. Main goal: increase profitability. They didn’t want to “go the Volkswagen way,” in the words of the Stellantis CEO himself, so they had to play every possible card in the deck.

In the first few years, the numbers seemed to be growing. Record results in 2021, greater growth in 2022 and new record profits in 2023. However, the last months of last year began to show that something was happening within the company. “We’ll stay strong like a rock before a turbulent 2024,” Tavares promised to reduce the number of critical voices.

However, wear and tear began to take its toll. We already know that Stellantis is looking to replace Carlos Tavares, whose contract as CEO expires in 2026. The strategy does not involve changing course in the coming months, but it is clear that Stellantis is unhappy with the direction the giant has taken in recent months.

It’s time to prove your worth

Until now, the company’s activities have been ensured by really good profits compared to other general companies. But over time, those profits have been falling, partly to blame is the strategy being followed in North America and weak sales of some brands.

Stellantis had already confirmed last September that it would cut annual production by 200,000 units. This figure was also accompanied by other bad news. Operating margin is expected to decline from 7% to 5.5%.

Dealers have problems sell electrified cars who produce and have sent a letter to Ursula von der Leyen asking for a revision of emissions limits in Europe expected in 2025, which will lead to the registration of a large number of electric vehicles. Letter he had access to Bloombergcompletely contrary to the position of Tavares, who constantly insists on maintaining emissions targets in their current form.

These new targets will force, as we say, a large number of cars to be registered, and dealers are afraid that they will have to reduce prices, which will make the cars very unprofitable and weaken the brand image. There are complaints about this in the United States as well.

The PowerArt podcast explains that the reserves accumulated in the American Stellantis ships are enormous. The company has delivered thousands upon thousands of vehicles to its brands, in line with expectations set out in its Dare Forward 2030 plan, which structured the auto giant’s decade-long strategy. Some American brands have committed to selling a range of cars that, of course, they cannot fit on the market and now they have two options: sell them at too low a price or leave the cars gathering dust.

“We will look at each brand’s performance at about two-thirds of the Dare Forward 2030 plan, so decisions can be expected in two to three years,” the Stellantis CEO said at the Paris Motor Show, according to the report. Automotive news. about the future of their brands.

The 14 companies that Leapmotor joined in 2023 to distribute and manufacture Chinese electric vehicles outside the Asian country will have to demonstrate that they create value for the auto conglomerate and that they are profitable in their own right.If they don’t make money, we close them.. “We can’t afford to have brands that don’t make money,” Tavares himself said this summer.

The threats seem to come directly from companies such as Alfa Romeo or Maserati, which are not achieving expected sales levels. However, soon after, the Stellantis chief had to take to the streets again to curb rumors of a possible sale of Maserati in statements that also ruled out the possibility of divesting Dodge or Chrysler in the short term.

However, Tavares never flinched and always talked about being accountable to the deadline. Therefore, the postponement until the end of the decade is, as expected, news. Additionally, this coincides with the departure of the company’s current CEO, who is expected to released 2026 Thus, the successor is left with the difficult task of maintaining or destroying the above-mentioned companies.

Statements about potential sales have generally been mixed. The doors never closed, and brands hoping to deliver in 2030 will have to do so “in two or three years,” according to Tavares himself. These are challenging times for the Stellantis Group’s brands.

Photo | Maserati

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