The Stellantis logo at the entrance to the company's factory in Hordain
for Giulio Piovaccari, Alessandro Parodi and Inti Landauro
When Elena Aragon, 24, decided to buy a car, she looked at the inexpensive brands in her hometown of Cádiz, Spain – including Fiat and Peugeot from Stellantis.
Eventually, she bought a Hyundai.
“I didn't like the basic models from Fiat and Peugeot. But the more advanced models, with the features I wanted, were too expensive,” explains the young woman, who opted for an i20 compact car equipped with sensors for blind spots and a reversing camera.
“I benefited from a nice discount and I ended up paying 17,000 euros,” explains Elena Aragon, instructor at an air traffic controller school.
The choice of Elena Aragon illustrates the problem encountered by Stellantis under the leadership of Carlos Tavares, its general director who resigned abruptly on Sunday.
Prices of its most accessible brands have increased, causing inflation-hit customers to flee, according to Reuters interviews with five car dealers, five consumers, two auto industry executives, conducted before Carlos' resignation Tavares and a study of the prices charged, carried out by the company JATO Dynamics.
Director of Stellantis since its creation in January 2021 following the merger of Fiat Chrysler Automobiles with the parent company of Peugeot PSA, Carlos Tavares had satisfied investors by quickly reducing costs and increasing operating margins to around 13 % last year, almost twice those of its rivals Volkswagen and Renault.
But after this auspicious start, the fall in sales and the increase in stocks on the American market led Stellantis to issue a profit warning in September, and its CEO to announce shortly after that he would retire in 2026 .
Investors focused on Stellantis' well-known difficulties in the United States. But the group is also encountering difficulties at home, in Europe, as the Reuters study shows.
Under the leadership of Carlos Tavares, Stellantis lost a third of its market share in Europe. During the same period, Fiat saw its market share in Europe halve to 1.8%, while Citroën's fell to 2.2%, according to data from the European Automobile Association. ACEA automobile.
The main shareholder of Stellantis is the Agnelli family, founders of Fiat, through the investment company EXOR headed by John Elkann.
The group said on Sunday it accepted the resignation of Carlos Tavares “effective immediately” and that John Elkann would chair a new interim executive committee. Milan-listed shares were down 7% at 08:34 GMT, their lowest level since July 2022.
European car dealers who spoke to Reuters point to Tavares' emphasis on efficiency and margins.
“Low-priced models have gradually disappeared from the Stellantis range,” says Alberto Di Tanno, founder of the Intergea dealership group, which manages 169 sales points in Italy and Switzerland.
For example, Lancia's Ypsilon model, one of ten Stellantis brands available in Europe, “was a 17,000 euro car. Today, it suddenly costs no less than 25,000 euros,” detailed the dealer.
In September, the average price of a Stellantis car in the 14 largest eurozone countries was almost 40,000 euros, higher than the average of other mass market competitors, according to data from JATO Dynamics provided to Reuters.
Cars from China's Saic, which owns the British brand MG, sell for 32,500 euros, while models from Renault, Mitsubishi and Suzuki cost less than 29,000 euros on average.
Since 2021, Stellantis' prices have increased in each of the five largest European markets: Germany, France, Italy, Spain and the United Kingdom. Hyundai and Toyota also increased their prices in these markets, but Volkswagen and Renault reduced them.
“Prices are increasing for Stellantis brands, but customers still view many of them as mass products,” said Felipe Munoz, principal analyst at JATO.
A former Stellantis sales executive told Reuters that the price hikes, as well as aggressive cost cuts, were part of Carlos Tavares' efforts to achieve a double-digit operating margin, particularly after the avian flu pandemic.
Stellantis' struggles in Europe mirror some of the problems the company has faced in North America with the premium Jeep brand.
Erin Keating, executive analyst at Cox Automotive, said buyers were shocked that Jeeps that sold for $35,000 in 2019 topped $60,000 this year, with some models even topping $100,000. The cost of these models was a deterrent for many buyers, who prioritized Jeeps for their ruggedness and affordability.
“He was looking to make a profit. They drove up vehicle prices, and I think he forgot to ask who my American consumer was,” said Erin Keating.
Stellantis told Reuters it plans to launch around 20 new models over the coming months, across all segments, to reach a 20% market share in the European Union.
Among these models is the Citroën C3, the electric version of which is offered from 23,000 euros, but which costs less than 15,000 euros with a combustion engine.
A DISAPPOINTED AMBITION
As with other European automakers, Stellantis' problems in Europe have been exacerbated by fierce competition from Asian rivals, including Hyundai and Toyota.
Chinese automakers including BYD, which collectively account for about 5% of Europe's auto sales and could have a 12% market share by 2030, according to consultant AlixPartners, undercut Stellantis' bid.
The small Fiat 500, traditionally associated with affordable mobility, is only sold as an electric vehicle, for around 29,000 euros.
“The prices (of Stellantis) are not right,” said Tony Fassina, founder of one of the largest car dealerships in Milan, Italy, who said “when the prices are right, the demand is there. ”
According to Herman Claes, president of the Stellantis Retailer Association for Belgium and Luxembourg, more and more Stellantis dealers in the region had started offering other brands to compensate for slowing sales, to the advantage of manufacturers. Chinese automobiles.
The complexity of the group was also a problem.
With 14 brands worldwide, Stellantis has the most brands among traditional automakers. After the split from Porsche in 2022, Volkswagen operates nine brands. Toyota only has three.
Stellantis' vast portfolio, however, has not ensured clearly differentiated products: Fiat and Citroën compete in the cheaper segment, Jeep and Alfa Romeo in the premium segment.
To save money, Stellantis' mid-sized vehicles are developed on the same STLA Medium technology platform, while smaller cars use Peugeot's CMP platform.
“Many Stellantis models overlap,” said Plinio Vanini, owner of Italy's largest dealership group, Autotorino.
(Reporting by Giulio Piovaccari in Milan, Alessandro Parodi in Gdansk, Inti Landauro in Madrid, Gilles Guillaume in Paris and Nora Eckert in Detroit; French version Florence Loève, editing by Sophie Louet)
