Skip to main content
Sister Publication Links
  • Automotive News
  • Automobilwoche
  • Automotive News Canada
  • Automotive News China
Subscribe
  • Subscribe
  • Newsletters
  • Login
  • HOME
    • Latest news
    • Automakers
    • Suppliers
    • New Product
    • Environment/Emissions
    • Sales By Market
    • On The Move
    • Auto Shows
    • Munich Auto Show
    • Geneva Auto Show
    • Paris Auto Show
    • Beijing Auto Show
    • Shanghai Auto Show
  • Features
    • Long Read
    • Interview of the Month
    • Focus on Electrification
    • Focus on Technology
    • Segment Analysis
    • Cars & Concepts
    • Supplier Spotlight
    • Europe By The Numbers
  • Opinion
    • Blogs
    • Commentary
    • Guest columnists
  • Photos
    • Photo Galleries
    • Geneva Photo Gallery
    • Beijing Photo Gallery
    • Frankfurt Photo Gallery
    • Paris Photo Gallery
    • Shanghai Photo Gallery
  • Podcasts
  • Car Cutaways
  • EVENTS
    • ANE Congress
    • ANE Rising Stars
    • ANE Eurostars
    • Meet the 2021 winners
    • Browse photos from the 2021 awards ceremony
  • More
    • Publishing Partners
    • Social Media
    • Contact Us
    • Media Kit
    • About Us
    • Capgemini: Securing the industry's future through a radical rethink
    • Capgemini: Succeeding with the automated driving journey through AI
    • HEXAGON: Plugging into data is the only way to make winning EVs
    • TUV Rheinland: Battery testing center for large battery packs and more
    • TUV Rheinland: Ideas, services and certifications for smart mobility
    • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
    • Toyota Europe
    • UFI Filters
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter
MENU
Breadcrumb
  1. Home
  2. Automakers
January 18, 2022 01:59 AM

After flying start, Stellantis must tackle Tesla and China

Stellantis shares rose over 60% in 1st year, beating Tesla

Reuters
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Stellantis sign

    If playing catch up with Tesla is what everyone in the auto industry is about then Stellantis, the company formed from the merger of Fiat Chrysler Automobiles and PSA Group, has had a good start – its shares have far outpaced its U.S. rival in its inaugural year.

    But this is just the first lap.

    Fixing its business in China and overcapacity in Europe are just two areas where analysts want to see Stellantis making progress when CEO Carlos Tavares unveils his detailed business plan on March 1.

    After all, despite its shares surging more than 60 percent since their debut on Jan. 18, 2021 compared with a 27 percent gain for Tesla's, Stellantis' market value of 59 billion euros ($67 billion) is still just 6 percent of its U.S. rival's.

    A strong first year augurs well, though, with Jefferies analysts saying Tavares has shown vision and ambition with a "sustained stream of strategic initiatives."

    Since forging the world's No. 4 automaker by production, Tavares has mapped out a 30 billion euro electrification strategy, and formed alliances with Amazon and iPhone assembler Foxconn to accelerate development of software and semiconductors for future connected vehicles.

    He has also drawn up plans for five battery plants and cut deals with unions to keep streamlining its European operations - side-stepping potential labor conflicts and pushing the company's operating profit margin up to around 10 percent.

    Excluding former PSA-controlled parts maker Faurecia, Stellantis' workforce was almost unchanged in the past year at around 300,000 -- keeping Tavares' promise not to cut jobs or close plants following the merger.

    All this despite facing a semiconductor and supply chain crunch that cost global automakers millions of vehicles in lost production last year and is not expected to ease quickly.

    Marco Santino, a partner at management consultants Oliver Wyman, said Tavares was living up to his reputation as a practical man avoiding a "muscular" approach with unions and the outlines of his strategy were in place.

    "The path has been mapped out already, it needs to be consolidated," he said. "I don't expect fireworks from his business plan."

    PSA CEO Carlos Tavares, left, with FCA CEO Mike Manley in December 2019 as the two automakers announced an agreement to merge.

    Challenges

    But many say more bold action is needed.

    Jefferies analysts, for example, say Stellantis' 14 brands, including Jeep, Ram, Citroen, Opel and Maserati, walk "a fine line between differentiation and internal competition."

    This at a time when Tesla is leading the industry transition to an electric and software-driven future with a single brand and a highly focused strategy.

    The road to Stellantis

    Oct. 29, 2019: Media outlets report that Fiat Chrysler Automobiles and PSA Group are in talks to create a "$50 billion trans-Atlantic auto giant"

    Dec. 18, 2019: PSA Group and FCA sign 50/50 merger agreement

    July 15, 2020: PSA and FCA reveal name of the future company: Stellantis

    Jan. 16, 2021: Merger is completed

    July 8, 2021: Stellantis outlines plans to electrify lineup with new platforms, five battery plants in Europe and North America

    Nov. 1, 2021: Former FCA CEO Mike Manley becomes head of U.S. auto retail giant AutoNation

    Dec. 7, 2021: Stellantis launches $23 billion software push through tie-ups with Amazon, BMW, Foxconn, Waymo and three new tech platform

    March 1, 2022: Long-term strategic plan to be unveiled

    Tavares has said every aspect of the group is under the microscope, including its brands, some of which analysts have suggested could be eliminated to save money.

    "For the time being, we love them all and you cannot kill what you love," the 63-year old said last year. "When you love them, you give them a chance," he said, adding each brand would be given 10 years to prove itself profitable.

    As the group enters its second year, another long term challenge is reviving its fortunes in China, the world's biggest auto market, where Fiat Chrysler and PSA had almost negligible market shares.

    "We are now negotiating and changing very many things at core," Tavares has said about his China plans, without giving details.

    Jefferies analysts said the company could look to leverage its strong Jeep and Maserati brands there. It could also consider using China as an export base to the rest of Asia, or deepen its ties with Foxconn beyond their current joint venture, they said.

    "Luckily for Tavares, he has got time," Oliver Wyman's Santino said. "Investors' focus is on Europe's turnaround at the moment. And on that he is delivering."

    Reuters

    Analysts say Stellantis could leverage its strong Jeep and Maserati brands in China. Shown is the Jeep stand at the 2021 Shanghai auto show.

    Related Article
    How Tesla is shaking up the European market, from the top down
    Stellantis will roll out Level 3 self-driving in 2024
    Stellantis launches $23 billion software push
    RECOMMENDED FOR YOU
    VW denied German government guarantees for China investment, report says
    Recommended for You
    VW China flags.JPG
    VW denied German government guarantees for China investment, report says
    bmw logo bb web.jpg
    CATL will supply BMW with cylindrical battery cells from 2025
    Japan Prius production
    Toyota cuts June output plan again as China lockdowns bite
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News Europe delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    SUBSCRIBE TODAY

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    SUBSCRIBE NOW
    Connect with Us
    • Twitter
    • Facebook
    • LinkedIn
    • Instagram

    Founded in 1996, Automotive News Europe is the preferred information source for decision-makers and opinion leaders operating in Europe.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI  48207-2997
    Tel: +1 877-812-1584

    Email Us

    ISSN 2643-6590 (print)
    ISSN 2643-6604 (online)

     

    Resources
    • About us
    • Contact Us
    • Advertise with us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Awards
    • Rising Stars
    • Eurostars
    • Leading Women
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Europe
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • HOME
      • Latest news
      • Automakers
      • Suppliers
      • New Product
      • Environment/Emissions
      • Sales By Market
      • On The Move
      • Auto Shows
        • Munich Auto Show
        • Geneva Auto Show
        • Paris Auto Show
        • Beijing Auto Show
        • Shanghai Auto Show
    • Features
      • Long Read
      • Interview of the Month
      • Focus on Electrification
      • Focus on Technology
      • Segment Analysis
      • Cars & Concepts
      • Supplier Spotlight
      • Europe By The Numbers
    • Opinion
      • Blogs
      • Commentary
      • Guest columnists
    • Photos
      • Photo Galleries
      • Geneva Photo Gallery
      • Beijing Photo Gallery
      • Frankfurt Photo Gallery
      • Paris Photo Gallery
      • Shanghai Photo Gallery
    • Podcasts
    • Car Cutaways
    • EVENTS
      • ANE Congress
      • ANE Rising Stars
        • Meet the 2021 winners
      • ANE Eurostars
        • Browse photos from the 2021 awards ceremony
    • More
      • Publishing Partners
        • Capgemini: Securing the industry's future through a radical rethink
        • Capgemini: Succeeding with the automated driving journey through AI
        • HEXAGON: Plugging into data is the only way to make winning EVs
        • TUV Rheinland: Battery testing center for large battery packs and more
        • TUV Rheinland: Ideas, services and certifications for smart mobility
        • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
        • Toyota Europe
        • UFI Filters
      • Social Media
        • Facebook
        • Instagram
        • LinkedIn
        • Twitter
      • Contact Us
      • Media Kit
      • About Us