A List Of Brands Stellantis Might Kill Ranked From ‘Jeep’ To ‘Most Likely’

Stellantis and Ford are out with their quarterly financial reports and neither are great, but only one CEO is out here threatening to murder brands. Can you guess the company and the CEO? You and I both know it’s Stellantis and our buddy Carlos Tavares.

I’ll keep this in some kind of logical order this morning, so let’s kick it off with a quick dip into the Stellantis numbers and why they’re so bad. We’ll then follow it up with all the brands that Tavares is threatening to knock off, ranked by how likely that’ll happen.

How’s Ford doing? Ford is doing fine. It’s still losing money on electric cars, but its commercial vehicle unit is killing it right now.

And, finally, Volvo is rethinking its plans to go all-EV and instead is thinking about those hybrids. Alright, let’s dump!

Stellantis Is Either In A Rough Transition Or Boned

It’s almost as if trying to squeeze as much money as you can out of old product, making your suppliers hate you, and firing a bunch of engineers doesn’t always work. I wrote at the end of the first quarter that I was concerned that Stellantis couldn’t stick the landing and, so far, Stellantis has not stuck the landing.

This was always going to be a rough year for the company as it starts to roll out new cars while, at the same time, trying to sell a backlog of its older models. The pandemic years were great for the Stellantis, as it was able to book huge profits because of vehicle scarcity and low interest rates. That wasn’t going to last forever.

Still, it feels like they’re doing worse than I’d have guessed. This isn’t to say that it’s hopeless or that Carlos Tavares, pictured, doesn’t have a plan. He does seem to have a plan, it’s just I’m not convinced that plan will work.

You can look at the whole first half presentation here and see how the company tries to rah rah the weak results. Stellantis as a whole made a net profit of $6 billion in the first half of the year, which sounds good until you consider that’s down a lot compared to the $8.3 billion they did in the first six months of 2023. Revenues are down 14% and the company’s margin dropped to 10%, which isn’t the worst in the industry but is bad for Stellantis.

Here’s how Tavares put it:

The Company’s performance in the first half of 2024 fell short of our expectations, reflecting both a challenging industry context as well as our own operational issues. While corrective actions were needed and are being taken to address these issues, we also have initiated an exciting product blitz, with no fewer than 20 new vehicles launching this year, and with that brings bigger opportunities when we execute well. We have significant work to do, especially in North America, to maximize our long-term potential. I want to thank every employee for their teamwork and commitment during this very consequential chapter of our story.

What’s the product, exactly, that’ll take them to the next level? This is what I want to know. The new Dodge Charger is interesting, I’m super excited about the Ramcharger, but that’s about it right now.

Ok, So Then What Should Stellantis Kill?

I’m not saying Stellantis should kill any brands, but Tavares, pictured above, is suggesting that this is what’s going to happen if certain brands can’t keep up.

This comes from Reuters:

“If they don’t make money, we’ll shut them down,” Carlos Tavares told reporters after the world’s No. 4 automaker delivered worse-than-expected first-half results, sending its shares down as much as 10%.

“We cannot afford to have brands that do not make money.”

Wasn’t this the same guy who, like, three years ago said that all these brands had ten years to prove their worth? Yes, it’s the same guy.

“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.”

Ok, so he doesn’t quite feel that way now that the pandemic is over and he’s not raking in money. So here is, I think, a list of brands they’ll cut in order from least to most likely.

SAFE BRANDS

• Jeep – That’s where the money is, at least for now. The company’s one true global brand.
• Leapmotor – This isn’t a first-in/first-out situation. Leapmotor is the most recent brand in the portfolio and cheap Chinese-built EVs are seen as the future so it would be wild to cut it just after bringing it on board.
• Peugeot – Stellantis is at least partially owned by the French state, so good luck with that.
• Fiat – Over Agnelli/Exor’s dead body right? The Italians are never gonna let this happen.
• Ram – That’s where a lot of money is, at least in the Americas.
• Citroën – The value of this brand is questionable, but I don’t see the French government supporting this.
• Dodge – It’s too American to cut. A Stellantis without Dodge is not the same company.

PROBABLY SAFE BRANDS

• Opel – It’s a strong, recognizable European brand with a decent portfolio.
• Vauxhall – I guess the same as above, but take about 25% off there.
• Abarth – If you’ve got Fiat you might as well keep Abarth.
• Alfa Romeo – It’s not a great brand in the United States, but there’s enough European appeal that it’s hard to see this going away.

HARDER TO MAKE AN ARGUMENT FOR

• Maserati – Someone wants Maserati, but it cost the company $90 million this year in losses, so maybe that someone is not Stellantis.

THE REDUNDANCIES

• Chrysler – Chrysler has a minivan and… that’s it. Nothing else. We know that it’ll get more, but does America need two different car brands? This would suck.
• DS – Hey, DS! France’s Chrysler. I love the DS brand and there was a time when the former-PSA did a good job of making unique DS cars. Those days are behind us now.
• Lancia – Hey, it’s Italy’s DS! Why does this brand still exist?

That’s my guess, at least.

[Ed Note: I think Maserati is the first to go. And if we’re using our brains and not our hearts, Alfa is right there after it. I also think Ram should just be Dodge again. -DT]. 

Ford’s Quarter Was Not Great, Not Terrible

Ford’s Q2 report is also out and the company saw revenues of about $48 billion, which was higher than what was expected, but its net income of $1.8 billion and EPS (earnings per share) were a little lower than expected.

What’s going on with Ford? Quality, quality, quality. All those warranty claims are starting to pile up and weigh down the automaker’s profits according to the press release:

Profitability was affected by an increase in warranty reserves, though efforts to lift the quality of new products are starting to pay off, with positive implications for customer satisfaction and Ford’s operating performance.

Ford split itself into three big divisions: Ford Blue (regular cars/hybrids), Ford Model e (electric cars), and Ford Pro (commercial vehicles/trucks). Ford Pro is killing it, making a 15.1% margin and bringing in $17 billion in revenue in Q2. Ford Blue made more in revenue at $26.7 billion, but with a much lower margin of 4.4%, so it’s less profitable overall.

And Ford Model e? It lost $400 million less than it had a year prior, but pricing pressure resulted in a -99.5% margin, which is real bad.

Volvo: Let’s Make Some More Hybrids

Year of the Hybrid? More like Decade of the Hybrid. Volvo has been the most militant of the major brands about going fully electric after 2030.

Let’s check in with Automotive News to see how that’s going:

Volvo Chief Commercial Officer Bjorn Annwall vowed last year that the automaker would not “sell a single car” globally that is not fully electric after 2030.

“There’s no ifs, no buts,” Annwall told Automotive News in June 2023.

Now, faced with slumping EV sales in key markets such as China and the U.S., Volvo’s leadership could be reconsidering going all-in on battery power.

Automotive News checked in with an unnamed dealer, who said the following:

“We will have to, or we will die,” said a dealer who requested not to be identified. “Volvo has gotten way out over their skis with this EV-only strategy.”

In the next decade, Volvo will focus on supplying plug-in hybrids while the EV market matures in the U.S. and elsewhere, said a person familiar with the company’s plans.

“They are keeping their fingers crossed that PHEVs will start to be looked at favorably by the different governments,” said the person, who asked not to be identified while speaking about internal matters.

Life comes at ya fast.

What I’m Listening To While Writing TMD

I will once again restate my belief that every Fiona Apple album is better than the last, but her debut “Tidal” is 28 years old this week and it’s worth revisiting how earth-shatteringly wonderful that album was. The video for “Never is a Promise” is also intense in a good way. What a talent!

The Big Question

You gotta kill five Stellantis brands. Who you picking?