The dream of the global car industry to deploy the same technology across a range of brands around the world has long been under pressure, and recent events have further pushed a once-profitable strategy further into the darkness.
“The difficulties of Stellantis continue to cast doubts about the global brand conglomerate business model,” Phillipe Houchois, analyst at the bank Jefferies, wrote in an investor note following the resignation of CEO Carlos Tavares on 1 December.
The battle between Tavares and the Stellantis board was more about management style than results, but his future at the company was in doubt the moment that it warned in October of substantially reduced deliveries in its key US market after the failure to shift the predicted quantity of Jeep and Ram vehicles..
In juggling 14 brands, Stellantis's focus on the urgent need to fill gaps in its European line-up took precedence over fixing similar problems among its American models.
“A big, big chunk of the decline in market share is simply because we have been blank in some very key opportunistic segments,” Stellantis CFO Doug Ostermann said during the Goldman Sachs autos conference on 4 December.
He referenced the lack of a replacement Jeep Cherokee (one is due in mid-2025), saying: “Not having any SUV entry in the largest segment of the market, for a brand like Jeep, is a is a big hole to fill.”
Meanwhile, also on 4 December, American giant General Motors said it was booking a $5 billion writedown on its once thriving business in China “to address market challenges and competitive conditions”.
It said the charges related to plant closures and “portfolio optimisation”, the latter likely referring to model reduction across its Buick and Chevrolet ranges.
GM long ago decided that it couldn’t make its European operations pay, selling Vauxhall/Opel to the PSA Group (now part of Stellantis) back in 2017.
Ford stayed but continued to struggle to sell cars profitably in the region. In November, the company said it was cutting a further 4000 jobs across Europe as it faced “significant competitive and economic headwinds”.
Ford has already significantly shrunk its offering, axing the best-selling Fiesta, Mondeo, Galaxy, C-Max and Focus. The brand’s focus is now on ‘hero models’ that relate more to its American heritage, as well as its profitable van range.
Meanwhile, the Volkswagen Group’s problems in China are legion as comes to terms with losing a once -dominant market share to local brands, who are proving more nimble at targeting a tech-hungry car-buying public.
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