Yahoo Finance Stellantis CEO Threatens to Axe Brands That Aren't Turning a Profit
The automotive conglomerate known as Stellantis owns 14 different automotive brands — a number that would make pre-recession General Motors blush. It's a broad strategy that theoretically keeps the Stellantis group competitive in a wide variety of segments and markets... but slipping profits in a disappointing first half of 2024 has group CEO Carlos Tavares considering a reduction in that broad swath of brands.
As the product of multiple mergers, the Stellantis portfolio includes a diverse variety of global brands — ones that heavily overlap with one another. Some are pairs that came into the conglomerate together, like Fiat and Lancia, Opel and Vauxhall, Peugeot and Citroen, and the trio of Chrysler, Dodge, and Jeep. Alfa Romeo and Maserati compete at different price points, but both offer a similar lineup of Italian performance sedans, crossovers, and coupes. Ram, Abarth, and DS Automobiles all represent relatively recent spin-offs of products from Dodge, Fiat, and Citroen respectively.
If individual companies within that portfolio are unprofitable, Stellantis could either choose to spin them off or shut them down entirely. The latter is a strategy that has not been seriously considered for a major American or European automotive brand since Mercury closed its doors in 2011, although brands like Opel and Vauxhall have avoided closure by selling to Stellantis in the first place. Holden, an Australian division of GM, is the only notable legacy auto brand to close its doors in recent years.
Tavares did not say what brands could end up on the chopping block. The executive told reporters that "if [individual brands] do not make money, we'll shut them down," but the brand's method of financial reporting does not indicate whether or not the majority of Stellantis brands return a profit. The company does not report individual results for any brand but Maserati, which suffered an $89 million adjusted operating loss to open 2023.
Stellantis is currently in the process of unveiling 20 new models over the course of 2024, but some companies have notably stale lineups. Two of the company's four American brands, Dodge and Chrysler, currently sell a combined three models in their home market. Dodge will make a leap forward when a wide variety of gas-powered and electric-powered Chargers hit the market later this year, but Chrysler still has not unveiled its announced upcoming crossover. Those older brands should be given an opportunity to rebuild, but relatively new companies like Abarth and DS may have a more difficult time justifying their existence.
Via Reuters.
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