New Stellantis CEO Plans More Distinctive Vehicle Brands -- Update
By Nora Naughton
Stellantis N.V.'s new Chief Executive Carlos Tavares outlined
his vision for the newly combined auto maker Tuesday, saying he
would preserve factories, draw more distinctions between brands and
reassess troubled operations in China.
Shares of the new auto-making company, created through the
merger of Fiat Chrysler Automobiles NV and Peugeot-maker PSA Group
over the weekend, began trading in New York on Tuesday morning,
following its debut on the Paris and Milan stock exchanges on
Mr. Tavares, the former PSA chief now leading Stellantis,
emphasized the company would use the group's combined heft, selling
vehicles under 14 brands and in 130 countries, to generate $6
billion in annual savings -- achieving about 80% of the cost cuts
by the end of 2024.
In all, he said his plan for the new company, which includes
Jeep, Ram, Citroën and Peugeot among its brands, aims to deliver
about $30 billion in shareholder value over the first four
He reiterated Stellantis wouldn't close factories or nix brands
as a result of the merger, working instead to lower costs by
combining the underlying engineering and creating more pricing
power within the lineups -- a tactic he had taken with Opel after
purchasing it from General Motors Co. several years ago.
As for Peugeot, Mr. Tavares said he hasn't yet made a decision
on reviving the brand in the U.S. He had previously contemplated
reintroducing the French brand to the U.S. after a three-decade
Rather, the focus will be first on generating savings and trying
to reposition existing brands to better capitalize on their
diversity, he said.
In taking the helm at Stellantis, Mr. Tavares said he believes
the combined scale of PSA and FCA, which gives the new company a
major presence in markets like North America and Europe, is an
asset but isn't itself the end goal.
"We believe Stellantis needs to be great, rather than big," Mr.
Tavares said in his first public remarks as Stellantis's CEO.
Stellantis's stock was up around 11% in early afternoon trading
Tuesday in New York. Its shares closed up 8% in Europe on Monday,
giving Stellantis a market valuation of about $51 billion.
The tie-up creating Stellantis is the auto industry's largest
merger since 1998. Mr. Tavares still faces a litany of challenges
in fitting the two companies' operations together, particularly as
car manufacturers try to rebuild momentum while the pandemic
continues to depress vehicle demand.
In China, where both FCA and PSA have long struggled, Mr.
Tavares said he has assigned an executive team to assess what went
wrong and draft a turnaround plan. He said the company is
considering all options right now, including exiting the country
"At this stage we do not exclude any scenario," he added.
The newly created Stellantis also enters an auto industry that
is quickly being reshaped by new rivals and technologies, such as
electric and self-driving vehicles. Mr. Tavares said the merger was
as much an offensive move as a defensive one, and the scale it will
deliver will help the car company pursue different business models
and approaches that could eventually deliver additional
Meanwhile, he believes the planned cost cuts will help protect
factory jobs and free up cash needed to revive brands that have
faltered in recent years.
For instance, the Fiat brand has long struggled with older
models and weak sales, leading to unused factory space in Europe.
Mr. Tavares said he hopes to leverage PSA's engineering resources
to quickly redo the Fiat lineup, and much like in his turnaround of
Opel, improve the profitability of its models.
"We will not shutdown plants as a consequence of the merger. I
can tell you that," he said. Rather, he described the tie-up as
acting like a shield to preserve factories and fill them up with
The company will also sharpen its focus on electric vehicles, in
part to meet stricter European regulations limiting tailpipe
emissions. By 2025, Stellantis said it plans to have an electric or
hybrid version of every new model in its lineup.
Write to Nora Naughton at Nora.Naughton@wsj.com
(END) Dow Jones Newswires
January 19, 2021 14:00 ET (19:00 GMT)
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