Stellantis CEO Carlos Tavares has never been one to shy away from candid and sometimes uncomfortable statements about the company’s market position. And his response to the company’s latest earnings report – in which it saw a net profit plunge of 48% – is no exception.
The automaker’s chief executive indicates there may be some tough decisions ahead as he looks to right the ship, among them reducing production rates to deal with high inventory rates in North America.
And one possibility for achieving this goal is pretty harsh, but perhaps necessary: Tavares says the company might kill some underperforming brands.
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When Tavares took on the role of CEO in 2021, he committed to investing in the company’s 14 brands for at least a decade, saying they all had a future with Stellantis. Now it appears he may have changed his tune. According to Reuters, Tavares has indicated that he is open to axing underperforming brands, saying “If they don’t make money, we’ll shut them down.”
Reports are swirling since the comments were published, with industry observers playing a guessing game as to which of the long-standing auto brands might be discontinued. Motor1 identified several that it viewed as being “at higher risk” like Lancia and Alfa Romeo. The report also proposes the question of whether Stellantis would be compelled to keep both Dodge and Chrysler, considering Chrysler now carries only one model on the market.
Motor1 also added that there were certain brands it considered “too big to fail” such as Jeep, Ram and Fiat.
One brand that Reuters suggests might be sold instead of killed – citing analysts – is storied luxury car brand Maserati. This is the only individual brand for which Stellantis broke out figures, and, with an operating loss of 82 millions euros, they weren’t good.
Reuters notes that there has been very little in terms of major brand discontinuation in automotive since the Great Recession, when we saw GM ax Pontiac and Saturn. With that said, any decisions here will most certainly carry major significance in the industry.
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