Stellantis is taking steps to address weak margins and high inventory at its United States (US) operations and will not hesitate to axe underperforming brands within its sprawling portfolio, said Carlos Tavares, its chief executive, on Thursday.
The warning for lossmaking brands is a turnaround for Tavares, who has maintained since Stellantis was created in 2021 from the merger of Italian-American automaker Fiat Chrysler and France’s PSA that all of its 14 brands including Maserati, Fiat, Peugeot and Jeep have a future.
“If they don’t make money, we’ll shut them down,” Tavares told reporters after the world’s fourth-largest automaker delivered worse-than-expected first-half results, causing its shares to fall by as much as 10%.
“We cannot afford to have brands that do not make money,” he adds.
The automaker now also considers China’s Leapmotor as its 15th brand, after it agreed a broad cooperation with the group.
Stellantis does not release figures for individual brands, except for Maserati which reported an 82 million euro adjusted operating loss in the first half.
Some analysts say Maserati could possibly be a target for a sale by Stellantis, while other brands such as Lancia or DS might be at risk of being scrapped given their marginal contribution to the group’s overall sales.
Stellantis’ Milan-listed shares were down as much as 12.5% on Thursday, hitting their lowest since August 2023.
That brings the loss for the year so far to 22%, making them the worst performer among the major European automakers.
Few automotive brands have been killed off since General Motors ditched the unprofitable Saturn and Pontiac during a U.S. government-led bankruptcy in the global financial crisis in 2008.
Tavares is under pressure to revive flagging margins and sales and cut inventory in the United States as Stellantis bets on the launch of 20 new models this year which it hopes will boost profitability.
Recent poor results from global carmakers have heightened worries about a weakening outlook for sales across major markets such as the U.S., whilst they also juggle an expensive transition to electric vehicles and growing competition from cheaper Chinese rivals.
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