Stellantis CEO says brands have 10 years to prove their worth
All 14 brands of Stellantis NV will have a decade of support and funding to prove their ability to rebound or grow, and their products will be developed in the regions where they are sold, CEO Carlos Tavares said Thursday.
The transatlantic automaker offers popular Ram pickup trucks and Jeep SUVs in the United States and Peugeot and Opel cars and crossovers in Europe. But products from other brands like Alfa Romeo, Chrysler, Dodge and Fiat are aging, some face carbon-emission regulation challenges, and others have struggled to gain traction.
"For the time being, we love them all," Tavares said from his home in Portugal during an Automotive News World Congress webinar. "Each (brand) CEO has 10 years for which I am telling him or her that he has the funding, the ability to build his long-term business plan and plan for the different product launches and technologies to make the brand grow or rebound and create value for the company."
Tavares previously stated his commitment to continuing all of the makes, which also include Abarth, Citroën, DS, Lancia, Maserati and Vauxhall. This week's comments, however, underscore the unique visibility given to each brand's leader to prove their worth. Stellantis itself is expected to share its 10-year strategy before the end of the year, Tavares said.
That gives each brand about one-and-a-half to two product cycles, which is a fair timeline, said Stephanie Brinley, principal automotive analyst for the Americas at IHS Markit Ltd.
"It's difficult to change a brand in one product cycle and to see if your ideas are taking hold," she said. "They want to prove they are valuable, not necessarily that it's the end destination in 10 years. It's if they've proven they can get to their goals and are contributing positively to the company."
Following the merger in January of Fiat Chrysler Automobiles NV and French rival Groupe PSA to create Stellantis, Jean-Philippe Imparato, the Peugeot brand's former CEO, was named to revive Alfa Romeo and its Italian sports cars. But Chrysler still lacks a permanent chief with Dodge CEO Tim Kuniskis taking up leadership there in the interim.
It's an empowering step by Tavares to give these storied names and their leaders the ability to decide their own fate, said Karl Brauer, executive analyst at auto information website iSeeCars.com.
"Chrysler’s got arguably the toughest path to victory," he said. "That's the brand with the least clear identity. That's the definition of building a brand, and you can't do that if people don’t know what the brand is about. Is Chrysler a luxury brand? A quality or value brand? A family brand? Is it a performance brand? It's arguably worn all of those hats, but none of them very well over the past 20-plus years."
Tavares added the automaker employs 28,000 engineers worldwide and the diverse representation of cultures in the company is a strategic advantage. Some industry observers have suggested Stellantis may have to reduce the number of its technical centers, particularly in Europe, as it condenses parts across brands. In April, Tavares shared plans for just four electric-vehicle platforms.
But the CEO said Thursday the automaker will continue to manage these centers, with Auburn Hills, Paris and Turin, Italy, as well as Rüsselsheim, Germany, acting as the "pillars" and smaller hubs in Shanghai and Africa serving the specific needs of products in their regions.
They also will serve as "centers for competency," Tavares said, with each having expertise in a certain type of technology or engineering, though he did not share details on what those could be.
"We will try to use this diversity of this worldwide engineering network," he said, "to provide the best solutions to our consumers."