Stellantis’ New Stance on Profitability
Stellantis CEO Carlos Tavares has recently announced a significant shift in the company’s approach towards its brand portfolio. In light of disappointing financial results for the first half of 2024, Tavares stated that Stellantis might discontinue brands that struggle to turn a profit. This stark warning follows the company’s financial report, which revealed worse-than-expected results, excluding Maserati, which recorded substantial losses.
Financial Performance and Strategic Shifts
The financial performance of Stellantis in the first half of 2024 has been a cause for concern. Tavares emphasized that the shortfall was due to both a challenging industry context and the company’s operational issues. He firmly stated, “If they don’t make money, we’ll shut them down. We cannot afford to have brands that do not make money.” This marks a notable change from Tavares’ previous stance, where he had shown support for the group’s individual brands since their 2021 merger.
Focus on Market Performance and Future Plans
In an effort to turn the tide, Tavares mentioned that he would be working with his team in the United States over the summer to boost sales performance and reduce dealer inventory. Part of this endeavor includes the global launch of 20 new models this year, a move Stellantis hopes will enhance their sales figures. While the company appears confident in its European operations, there is a clear focus on improving performance in North America, where results have fallen short of expectations.
Implications for Low-Volume Brands
The new stance could spell trouble for low-volume brands such as Maserati and Fiat. Currently, Fiat’s only offering in the North American market is the recently revamped 500e, whereas Maserati maintains a full lineup of internal combustion cars and SUVs, with several electric vehicles on the horizon. The future of these brands within the Stellantis umbrella remains uncertain as the company aims to optimize its portfolio for profitability.
