Stellantis, the multinational automotive conglomerate behind Jeep, Ram, Peugeot, Fiat, and other brands, has reported a significant drop in net profits for 2024. However, the company is implementing several strategic measures to turn its fortunes around and is projecting a return to profitable growth in 2025.
Profit Decline and Leadership Transition
In a recent announcement, Stellantis revealed that its net profit decreased sharply from €18.6 billion (A$31.1 billion) in 2023 to €5.5 billion (A$9.2 billion) in 2024, marking a substantial 70% decline. This follows a challenging year for the company, which also saw the abrupt resignation of its CEO, Carlos Tavares, in December 2024. Tavares had previously indicated his intention to retire in 2026, making the sudden departure unexpected.
Despite the current challenges, Stellantis' interim leadership team is taking decisive actions to improve the company's performance and profitability.
Strategic Initiatives for Recovery
Stellantis has outlined several key initiatives aimed at driving a recovery in 2025. These include:
- New Model Launches: Stellantis plans to launch 10 new models across its portfolio of brands in 2025. The company says almost all will be on new STLA family platforms and that it is prioritizing launches of critical models in key segments.
- Strengthening Dealer Relationships: Recognizing the importance of its dealer network, Stellantis intends to rebuild relationships with dealers in the US and Europe. This effort aims to improve communication and address concerns that have arisen in recent years.
- Supplier Collaboration: Stellantis is focused on improving communication and collaboration with its suppliers to ensure a more efficient and responsive supply chain.
- CO2 Regulation Compliance: The company aims to make better use of available flexibilities under CO2 regulations to optimize its product offerings and comply with environmental standards.
Challenges in the US Market
The US has historically been a critical market for Jeep, Ram, Dodge, and Chrysler, but Stellantis has faced challenges in this region. Tensions between the company and its US dealers have been exacerbated by slowing sales.
In an open letter to then-CEO Carlos Tavares, Kevin Farrish, chairman of the Stellantis National Dealer Council, expressed concerns about the company's direction, accusing it of ignoring warnings that led to a "disaster" for all involved.
Farrish highlighted issues such as declining market share, falling stock prices, plant closures, layoffs, and lawsuits, attributing these problems to short-term decision-making aimed at securing record profits in 2023. While Stellantis' US division pushed back on the dealer council chief’s letter, calling it a “personal attack”, Mr Tavares resigned only a handful of months later.
To address these issues, Stellantis has implemented an action plan for the US, including increased incentives on 2024 and older model year vehicles to reduce inventory. As a result, Stellantis reported that its US inventories at the end of 2024 were 20% lower year-on-year compared to 2023.
Australian Market Performance
In Australia, Stellantis is directly responsible for distributing Jeep, Fiat, Abarth, and Alfa Romeo. It also has a joint venture to distribute the Chinese brand Leapmotor. Ateco handles the distribution of Maserati and Ram, while Inchcape distributes Peugeot.
2024 was a challenging year for Stellantis brands in Australia, with all of them experiencing double-digit sales declines:
- Ram: 3852 vehicles, down 43.6%
- Jeep: 2377 vehicles, down 48.7%
- Peugeot: 1896 vehicles, down 24.6%
- Alfa Romeo: 561 vehicles, down 21.6%
- Fiat (including Abarth): 527 vehicles, down 30.2%
- Maserati: 377 vehicles, down 40.9%
Looking Ahead
Despite recent challenges, Stellantis remains optimistic about its future prospects. The company is focused on implementing its strategic initiatives, launching new models, and strengthening relationships with key stakeholders. As Stellantis navigates a rapidly evolving automotive landscape, its ability to adapt and innovate will be crucial to achieving its goals and delivering sustainable value to shareholders.
