Stellantis faces brands dilemma as it searches for new CEO

As Stellantis chairman John Elkann interviews CEO candidates, deciding how many of the automaker’s 14 brands have a viable future is a significant priority.

The French-Italian company’s sprawling portfolio — the largest among its peers, which mostly focus on one or two brands — reflects its origins in a 2021 merger of Fiat-Chrysler and Peugeot owner PSA. 

Shrinking it could reduce complexity and allow some marketing, development and sales functions to be merged.

But each brand — from bestsellers like Jeep, Ram and Peugeot to struggling DS, Lancia and Alfa Romeo — has its fans, making which to drop a difficult choice.

In Europe, for example, where Stellantis is the second-largest carmaker after Volkswagen (VW), its top-selling Peugeot marque had a market share of just 4.9 per cent last year, or eighth position overall.

Low consumer recognition of the Stellantis corporate name, unlike rivals such as VW or Toyota, is another handicap.

A source familiar with Elkann’s thinking told Reuters the topic was a priority, and that any applicant for chief executive without an idea about the brands “is not the right candidate.”

Former CEO Carlos Tavares often said traditional automakers faced a “Darwinian era” where the weakest would fail — while insisting all Stellantis’ brands had a future.

When Tavares was forced out in December, Elkann moved fast to rebuild investor confidence hurt by slumping sales and profit margins in the U.S. market, traditionally its most profitable, with the Jeep, Ram, Chrysler and Dodge brands.

The world’s fourth-largest carmaker globally by sales has performed less well in Europe, while it closed a Jeep-making joint-venture in China almost three years ago and has no plans to push for a relaunch as opportunities there recede.

The new CEO must “be ready to take strong decisions,” said Fabio Caldato of Acomea SGR, which owns Stellantis shares.

“If I am not thinking with my heart, but as an investor, I would see it as very positive that the new CEO is determined to review the brand portfolio,” he said.

Brands seen by analysts as vulnerable to a portfolio reshuffle include premium marques Alfa Romeo, DS and Lancia. Dodge and Chrysler are seen as survivors despite a less than stellar performance, as they have U.S. driver recognition and appeal to specific market segments.

Automakers have traditionally dropped famous brands only reluctantly, as when GM axed Saturn and Pontiac and Ford its Mercury nameplate during the late 2000s recession.

In a statement to Reuters, Stellantis said each of its brands had plans for new products and that recent organizational changes…