Stellantis considers shutting down unprofitable brands after first-half results

Author

Colin Velez
July 26, 2024

Stellantis is ready to shut down its unprofitable brands after posting disappointing financial results for the first six months of 2024.

Why it matters: While Stellantis seems ready to make some much-needed course corrections, the success of its rivals means the automaker has an uphill battle.

By the numbers:

  • Stellantis reported revenue of $92 billion for the first half of 2024, down 14% year-over-year.

  • Net profit plummeted throughout the period, falling 48% to roughly $6 billion.

  • The brand said the declines were caused by falling global sales volume and poor product mix.

Between the lines: Stellantis has consistently had some of the highest days’ supply in the U.S., and has been much slower to cut prices than its Detroit-Three peers. Leading CEO Carlos Tavares to issue an ultimatum to under-performing brands.

Key quote: “If they don't make money, we'll shut them down,” Tavares stated. “We cannot afford to have brands that do not make money.”

The big picture: Since merging Fiat Chrysler and PSA Group in 2021, the automaker has struggled to keep up its momentum. While the company initially downplayed challenges, focusing instead on its solid profit margins, it's now addressing them head-on.

Tavares is betting on a wave of new car launches, including a big push into EVs, to turn things around. It's a sharp shift from the company's previous hesitation on electrification.

Bottom line: Only time will tell if Stellantis actually follows through on their commitments. The only thing we know for sure is that the longer it takes to correct course, the more consumers and dealers will be affected.

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