As Stellantis (STLAM.MI) embarks on a search for its next CEO, Chairman John Elkann faces a crucial decision—determining which of the automaker’s 14 brands have a viable future. This evaluation is essential as the company seeks to streamline operations and enhance profitability.
Contents
- 1 Stellantis’ Expansive Portfolio: A Challenge and an Opportunity
- 2 CEO Search: A Crucial Decision for Stellantis’ Future
- 3 Brand Consolidation: A Tough but Necessary Step?
- 4 Could Merging Brands Be the Answer?
- 5 Challenges in the U.S. Market
- 6 European Struggles and Electrification Challenges
- 7 Emphasizing EVs and Market-Specific Strategies
- 8 A Critical Moment for Stellantis
Stellantis’ Expansive Portfolio: A Challenge and an Opportunity
The French-Italian automaker, born from the 2021 merger of Fiat-Chrysler and Peugeot-owner PSA, holds the largest brand portfolio among its competitors. Unlike rivals that focus on one or two key brands, Stellantis juggles multiple marques, from top sellers like Jeep, Ram, and Peugeot to struggling names like DS, Lancia, and Alfa Romeo. Reducing the number of brands could simplify marketing, development, and sales strategies, making operations more efficient.
However, cutting brands is not a straightforward decision. Each marque has a loyal fan base, making any elimination a sensitive issue. For example, in Europe—where Stellantis ranks as the second-largest carmaker after Volkswagen—Peugeot holds only a 4.9% market share, placing it eighth overall. Compounding the challenge is Stellantis’ relatively low corporate recognition compared to industry giants like Volkswagen and Toyota.
CEO Search: A Crucial Decision for Stellantis’ Future
A source close to Elkann told Reuters that any CEO candidate without a strong brand strategy would not be considered suitable for the role. Former CEO Carlos Tavares emphasized the survival of all brands, arguing that the automotive industry was undergoing a “Darwinian era” where only the strongest would prevail. However, his departure in December triggered concerns among investors, particularly regarding Stellantis’ declining U.S. sales and profit margins.
The incoming CEO must make bold strategic choices. According to Fabio Caldato of Acomea SGR, a Stellantis shareholder, a decisive review of the brand portfolio could benefit investors. Analysts speculate that Alfa Romeo, DS, and Lancia are the most vulnerable to restructuring. Meanwhile, Dodge and Chrysler, despite their lackluster performance, remain relevant due to their U.S. market recognition.
Brand Consolidation: A Tough but Necessary Step?
Historically, automakers have been reluctant to discontinue legacy brands, as seen when General Motors retired Saturn and Pontiac or when Ford phased out Mercury during the 2008 financial crisis. Stellantis, however, must balance sentimentality with financial pragmatism.
The company insists that each brand has a future, citing ongoing product plans and recent organizational shifts to bolster them. A Stellantis spokesperson stated that the company remains dedicated to providing customers with a wider range of options by drawing on the strong heritage and distinct identities of its 14 brands.
Could Merging Brands Be the Answer?
Internally, Stellantis executives acknowledge the portfolio’s complexity but struggle to determine which brands to cut. Jeep and Ram dominate U.S. sales, while Chrysler and Dodge have seen reduced market presence. Jeep alone accounted for at least 15% of Stellantis’ global sales in 2024, whereas Chrysler and Dodge each contributed about 3%.
Industry expert Erin Keating from Cox Automotive suggests a possible solution: integrating Chrysler into Jeep and merging Ram with Dodge. However, she cautions that such a move may not generate substantial cost savings due to the individual brand equity and dealership structures.
Challenges in the U.S. Market
Stellantis ranked fifth in the U.S. market in 2024, losing the fourth spot to Honda after significant price hikes drove away customers. Jeep, its leading U.S. brand, held just under 4% market share. Keating emphasizes that Stellantis should focus on pricing strategies to retain customers. U.S. dealers share this sentiment, calling for stronger efforts to revitalize iconic brands rather than eliminating them.
European Struggles and Electrification Challenges
Europe presents an even bigger challenge. Stellantis has been slow to electrify its lineup, making it vulnerable to stringent carbon emission regulations and increasing competition from Chinese EV manufacturers.
Italian dealership owner Tony Fassina warns that shutting down brands could hurt sales. “If Stellantis closes brands, it will definitely lose customers,” he stated. Marco Santino, a consultant at Oliver Wyman, points out that Peugeot and Opel overlap in the European mass-market segment, while Stellantis struggles to compete in the premium sector.
Premium European brands such as Alfa Romeo, Lancia, and DS held a mere 0.3% market share in 2024—far behind industry leaders like Audi and BMW. Santino suggests Alfa Romeo could shift toward a niche sports brand as its customer base ages. However, revamping its premium positioning would require starting from scratch.
Emphasizing EVs and Market-Specific Strategies
Stellantis aims to launch nearly 20 new or updated models between late 2024 and 2025, with a focus on EVs and hybrids. The Citroën C3, expected to be the most affordable European-made EV, highlights the company’s shift toward electrification.
A potential game-changer is Stellantis’ joint venture with Leapmotor, sometimes described as its unofficial 15th brand. This partnership allows Stellantis to sell, import, and manufacture Leapmotor’s EV models outside China, providing a significant boost to its electrification strategy.
Fiat, Stellantis’ global bestseller, continues to perform well in emerging markets such as Brazil and Turkey, as well as in the European city car segment with the 500 model. Industry analysts suggest Fiat should focus on affordable models, while another Stellantis brand could take the lead in the EV market.
A Critical Moment for Stellantis
The automotive industry is evolving rapidly, and Stellantis must adapt to survive. While brand loyalty is strong, market conditions demand tough decisions. In the coming years, the company may be forced to retire or consolidate brands to remain competitive. The next CEO will play a decisive role in shaping Stellantis’ future—either by preserving its vast portfolio or making the bold call to restructure it for long-term success.
