Stellantis ready to discontinue brands that are not profitable

The Stellantis automotive group, one of the largest in the world, born from the merger between PSA and FCA in 2021, which brings together 14 brands, may in the future give up on brands that do not generate profit. The signal of this measure was given by Carlo Tavares, CEO of Stellantis, in an interview with “Reuters”, where he made it clear that “unprofitable brands will be discontinued. We cannot afford to have brands that are not profitable.” Carlos Tavares did not disclose which brands may be at risk, although he recognized that all the group’s brands are important and profitable assets, but there is “absolutely no taboo” if their performance worsens. The warning for deficit brands comes after Stellantis announced that the profits for the first half of 2024 recorded a 48% drop to €5,647 million, compared to the same period in 2023.

It should be remembered that in 2021, after the merger between PSA and FCA, the management of the world’s fourth largest automaker announced the decision to invest in the 14 brands for 10 years. However, worrying signs have now emerged three years later, at a time when the automotive sector is facing a decline in demand, especially for electric vehicles, and facing increasing competition in Asia and Europe from Chinese manufacturers.

In addition, Stellantis saw its sales in the US decline by 18% in the first half of 2024 compared to the same period in 2023. Stellantis justifies the decline by discontinuing four models: Dodge Charger and Challenger, as well as the Jeep Renegade and Cherokee. In addition, sales of the Ram 1500 were lower because the pickup truck underwent a mid-cycle update.

In other markets, the decline in sales was less significant, such as in Europe and South America, with a 6% decrease. In contrast, the Middle East and Africa markets saw a 3% growth, benefiting from the tripled sales of Fiat in the period under review.