‘If they don't make money, we'll shut them down’: Stellantis CEO warns of dropping car brands
When Stellantis formed in 2021 through the merging of Fiat Chrysler and PSA Peugeot Citroen, there were fears that some of its brands could face the axe.
The auto giant suddenly found itself with 14 brands, some of which were under performing, largely due to a lack of new model investment.
At the time, Chief Executive Carlos Tavares was quick to assure the world that each of these brands would receive funding for at least 10 years.
"For the time being, we love them all and you cannot kill what you love," Tavares said at a media conference in May 2021.
But now the CEO’s patience appears to be wearing thin.
At a conference on Thursday, where Stellantis announced unexpectedly poor financial results for the first half, Tavares said the company could not afford to keep brands that don’t make money.
“If they don't make money, we'll shut them down," Tavares said, effectively backtracking on his promise made three years earlier.
According to Reuters, the auto giant - which is the fourth largest in the world - saw its operating income drop by 40% to 8.4 billion euros (R168 billion) during the first half of 2024, while its profit margin fell to just below 10%.
Tavares did not mention which brands could be in the firing line, but analysts have speculated that Maserati could be sold off at some stage, Reuters reports, while Lancia, Chrysler and Citroen spin-off DS are seen as vulnerable given their marginal sales figures.
Lancia has benefited from some much-needed investment since the 2021 merger, having launched a new-generation Ypsilon, and Stellantis has promised to revive some iconic Lancia nameplates such as Delta.
Committed to South Africa
Stellantis sells seven automotive brands in South Africa, namely Abarth, Alfa Romeo, Citroen, Fiat, Jeep, Opel and Peugeot, while its Maserati marque is distributed by a separate company.
Apart from the latter, it’s unlikely that any of the brands represented locally would be killed off.
Stellantis is planning to open its first factory in South Africa in late 2025, situated at the Coega Special Economic Zone (SEZ) near Gqeberha in the Eastern Cape.
Stellantis announced in 2023 that it would produce the Peugeot Landtrek bakkie at the facility, following a R3 investment that will see it building vehicles for local consumption and export.
IOL Motoring