A restructuring of the Stellantis portfolio to boost its profits has been announced by CEO Carlos Tavares, after margins fell significantly in North America, Stellantis’ core profit region.
Stellantis looks poised to sell or cut the business of its underperforming brands after a sharp drop in H1 2024 earnings. Maserati comes under scrutiny after disappointing H1 2024.
Stellantis’ luxury brand had a negative operating margin and lost more than 50% of its sales. Stellantis Group CFO Natalie Knight said that in the future there could be a debate about the “best home” for Maserati, adding that:
Stellantis takes decisive action to address business challenges. The North American market needs the most work and is where we are most focused as we look into the second half of the year. There are operational issues that we’ve had in North America where I think we could have performed stronger.
Stellantis will cut production in North America this quarter, as well as prices. That’s one of the things that’s important for us, to calibrate how supply and demand meet.
The Grecale is the only high-volume model from Maserati’s lineup, but sales have plummeted in the first half of the year.
After Maserati reported sharply lower sales numbers and significant money losses in the first half of this year, Knight said all scenarios were being considered for the luxury brand.
All the group’s brands are important assets but there is absolutely no taboo if their performance deteriorates,
Brands are here to be leveraged. If they are not able to monetize the value they represent, then the decisions will come.
If they don’t make money, we’ll shut them down. We can’t afford to have brands that don’t make money.
We have significant work to do, especially in North America, to maximize our long-term potential,
Tavares said.
Tavares did not name any brands at risk of closure, but some are at higher risk than others. Industry experts say Stellantis could try to sell Maserati and kill off Lancia, Chrysler or DS. However, it’s all speculation at this point. What we do know is that there are many brands under the huge corporate umbrella that are too big to fail, including: Fiat, Opel/Vauxhall, Peugeot, Citroen, Jeep and Ram.
Tavares also admitted that there are many build quality issues at Ram’s US factories, with many brand new pickups needing repairs before they are shipped to the company’s dealers to be sold.
Stellantis said adjusted operating income almost fell 48% in the 2024 half to €5.6bn, after a big drop in sales in the US and Europe. Operating margin on adjusted EBIT fell to just under 10%. Turnover also fell by 14% to €85 billion.
The results, which sent Stellantis shares down as much as 22%, are also a result of the fact that the company also has to deal with its high levels of car inventories in the US, reaching 94 days of inventory.
To deal with the recession, Stellantis is already moving to divest assets. He announced the sale of a majority stake in robotics unit Comau, setting up yet another standoff with unions in Italy. It will also carry out a strategic review of its UK operations.
With North American shipments down 18 percent, Stellantis decided to revive some models it had withdrawn from the U.S. market, including the Dodge Charger, to win back some customers, Knight said.
The automaker is also likely to cut prices, especially as it introduces new products, Knight added. North America, where Stellantis cut production in the third quarter, “is the market that needs the most work and where we are most focused,” Knight said.
Stellantis has under its umbrella Abarth, Alfa Romeo, Chrysler, Citroen, Dodge, DS Automobiles, Fiat, Fiat Professional, Jeep, Lancia, Maserati, Mopar, Opel, Peugeot, Ram and Vauxhall. The Stellantis group has 300,000 employees, with a presence in more than 130 countries and with production facilities in 30 countries.
Source: www.autoblog.gr
