Stellantis CEO Tavares says van unit will have freedom to develop new technologies

Stellantis CEO Carlos Tavares says a fully independent commercial vehicles business unit will unlock more value from a sector that already plays an important role in the automaker’s profitability.

The unit could build on Stellantis’ recent agreement with Amazon to provide battery-electric Ram ProMaster vans with “unique last mile delivery solutions.”

It will also develop alternative energy powertrains, including hydrogen fuel cells, and investigate the possibility of using autonomous vehicle technology.

In his Dare Forward strategic plan, presented last week, Tavares designated commercial vehicles as one of seven “accretive businesses” that will help Stellantis double its revenues to 300 billion euros by 2030. 

Among his ambitions: Double commercial vehicle revenues to an unnamed sum; launch 26 new products, with one major launch each year; 100 percent full-electric options for vans and pickups in the U.S. and Europe; and 40 percent of vehicles sold with battery-electric drivetrains (except heavy-duty trucks).

“Our goals are simple: to be the undisputed leader in terms of market share and profitability,” Tavares said. “This is going to be a worldwide business unit, taking care of all the markets, all the brands, all the products, mostly vans and pickup trucks.”

In Europe, Tavares has created a range of commercial vans spread over four brands – Citroen, Fiat, Peugeot and Opel/Vauxhall – that will eventually be largely interchangeable but tailored for various markets. The automaker also builds vans for Toyota.

Stellantis’ current light-commercial vehicle operations are directed by Xavier Peugeot, who holds the title of senior vice president, commercial vehicles business unit. Tavares created a separate light-commercial vehicle business unit while head of PSA Group in 2016, run first by Philippe Narbeburu.

It is not clear if Xavier Peugeot would hold the same title with the new unit.

“We will create a new business entity dedicated to our professional customers and their needs, and the management team will have more autonomy,” Tavares said, adding that he would offer more details, including about the management team, in the coming months.

He did not say whether the new business would be spun off from Stellantis’ passenger car operations, as Mercedes-Benz Group did last year with Daimler Trucks.

“It's a huge business with a huge profitable growth potential, and I don't want them to be slowed down by the rest of the company, if that was to happen,” Tavares said. “So if I want that to be unleashed, the better way is to give them dedicated personnel, dedicated plants, dedicated autonomy in terms of management, making sure that they can unleash their full potential.”

Analysts say that in Europe, at least, commercial vans can have double-digit margins, similar to that of a well-equipped SUV, because the technology has a longer lifespan than passenger cars, and they are simpler to assemble.

The business is highly competitive, with a shifting array of production and technology alliances. In the latest combination, Ford will develop and build commercial vans and the new-generation Amarok pickup for the VW Group.

Stellantis was the market leader last year in Europe, where it had a 34 percent market share, and South America, where it held a 31 percent share. In 2020, the combined van sales from PSA Group and Fiat Chrysler more than doubled that of their nearest competitor, Ford.

Stellantis has also been a pioneer in alternative energy powertrains for vans, with full-electric options for its compact, midsize and large vans in Europe. Midsize vans from Citroen, Peugeot and Opel are even available with hydrogen fuel-cell powertrains, working with partners including supplier Faurecia and Symbio, a joint venture of Faurecia and tiremaker Michelin. 

The van business was an important lever to return Opel/Vauxhall to sustainable profits soon after PSA Group bought the brand from GM in 2017. Tavares moved Opel’s vans onto PSA platforms, added a compact van to Opel’s lineup and ensured that midsize vans would be built at Vauxhall’s imperiled Luton factory.

A similar model is in the works for Fiat, which has had a long relationship with PSA (and now Stellantis) in assembling vans at two factories: A now-defunct partnership in northern France called Sevel Nord, and a continuing operation in southern Italy called Sevelsud that builds large vans.

Fiat’s midsize vans are moving on the same platform as Citroen, Opel/Vauxhall and Peugeot, with the Ulysse nameplate. 

In fact, PSA’s van strategy was almost too successful: The main antitrust issue ahead of the merger with Fiat-Chrysler Automobiles to create Stellantis was whether the new group would have an unfair advantage in commercial vans, with a market share of well over 40 percent in some markets. 

Under a December 2020 agreement that allowed the merger to take place, Stellantis will help build up Toyota’s van share and give competitors more access to its repair and maintenance networks.