Created by the marriage of Fiat Chrysler and PSA in 2021, the company's structure, designed to compete with its European (Volkswagen), Asian (Toyota) and American (Ford Motors) peers, initially showed great promise. Fiscal years 2022 and 2023 were lucrative, with synergies immediately visible. Net margins even approached 10%, and price increase programs boosted sales. On the stockmarket, the share followed this fine growth trajectory, peaking in March 2024, just a year ago, when the future promise of the fine ship led by the charismatic Carlos Tavares seemed unsinkable.
But the bride was too beautiful. Shareholders of the Franco-Italian group were brought back down to earth by a string of bad news. Pell-mell, the group suffered the arrival of Chinese automakers and the wrath of North American dealers, which accused the company of disastrous practices after Tavares inflated distributor inventories far beyond what was necessary to artificially boost sales and profits. This method, known as "channel stuffing", was used to justify an unprecedented level of remuneration in the sector, which caused quite a stir. There were also reliability issues on vehicles leaving the factory, price pressures on certain brands, notably Jeep, and a string of disappointing results. The economic downturn also took its toll, with rising interest rates and the effects of inflation. Pushed towards the exit, Carlos Tavares was replaced by John Elkann, a member of the Agnelli family, which controls 16% of the group via the Exor holding company.
Such, then, is the group's situation, which must now face - like the rest of the automotive industry - uncertainties associated with tariffs. Donald Trump has made the automotive sector one of his primary targets. Tariffs of 25% came into force on April 3 for all imports from other continents. On the stockmarket, the share is now trading below its IPO price of €7.8; its capitalization is now below €23bn.
Stellantis is trying to find solutions to this: John Elkann has asked McKinsey to assess the options for Maserati and Alfa Romeo. Bloomberg reports that the options under consideration include partnerships with other manufacturers to gain access to new technologies, or even, over the longer term, the demerger of Maserati. However, the CEO refuses to consider any sale to a Chinese competitor. Maserati - the brand of the company's "luxury" segment - sold 14,700 units last year, a third of them in the United States and Mexico. In all, the group generated revenues of just over €1bn.
The problem is further complicated by the fact that vehicles for both brands - Maserati and Alfa Romeo - are produced in Europe and therefore have to be imported, subjecting them to customs duties.
As you can see, Stellantis is not in a strong position - far from it. The company is trying a number of initiatives, including lowering prices in the United States to regain the market share lost in recent months, although this will not be enough to offset the impact of the massive tariffs. The group is also looking to fill gaps in its marketed vehicle ranges.
