The CEO of global automotive conglomerate Stellantis has threatened to axe underperforming brands in its large portfolio.
Stellantis – the company formed after the merger of Fiat Chrysler Automobiles and Groupe PSA in 2021 – could axe underperforming brands in its sprawling portfolio.
Carlos Tavares, the current CEO of Stellantis and former head of Groupe PSA, told reporters this week the automotive group would not hesitate to ‘shut down’ brands which continue to operate at a loss.
The Stellantis group was formed in 2021 and includes 15 different automotive brands, including Alfa Romeo, Chrysler, Citroen, Fiat, Jeep, Maserati, Opel, Peugeot and Ram.
Other brands include Abarth, Dodge, DS, Lancia, Vauxhall, and China’s Leapmotor which Stellantis now owns a 51 per cent stake in.
It follows a disappointing first half of 2024 result for Stellantis, which saw its shares fall as much as 10 per cent.
“If they don’t make money, we’ll shut them down,” said Tavares. “We cannot afford to have brands that do not make money.”
Stellantis did not reveal individual results for each of its brands – except Maserati which reported an 82 million euro ($AU136 million) operating loss in the first half of 2024.
Overall, Stellantis reported a net revenue of €85 billion ($AU141B) – down 14 per cent from the same time in 2023 – and a net profit of €5.6 billion ($AU9B), a 48 per cent decrease from 2023.
“The Company’s performance in the first half of 2024 fell short of our expectations, reflecting both a challenging industry context as well as our own operational issues,” said Tavares in a media release.
Reuters reports Maserati could be targeted for a sale, while others – such as the European-focused Lancia or DS marques – could be scrapped due to their minuscule sales compared to the group’s overall volume.
In May 2021, four months after the merger to form Stellantis was finalised, Tavares said all of the group’s brands would be given a 10-year lifeline to prove their viabilities.
“We’re giving each [company] a chance, giving each a time window of 10 years [until 2031] and giving funding for 10 years to do a core model strategy – the CEOs need to be clear in brand promise, customers, targets and brand communications.”
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