By Giulio Piovaccari, Alessandro Parodi and Inti Landauro
MILAN (Reuters) – When 24-year-old Elena Aragon started shopping for a new car, she checked out the brands without filters in her hometown of Cadiz, Spain, including Stellantis’ Fiat and Peugeot.
Finally, he bought a Hyundai.
“The special models of Fiat and Peugeot did not appeal to me. But the most advanced, with the things I wanted, was very expensive,” said Aragon, who decided to buy an i20 compact car with blind sensors and a. rear camera.
“I got a sweet salary and I ended up paying 17,000 euros,” the instructor at the pilot school said.
Aragon’s decision reveals the problem that had plagued Stellantis under the President of Carlos Tavares, who resigned on Sunday: the rise in prices on the capital markets has driven away buyers facing inflation, according to a Reuters interview with five car dealers, five buyers, two. automotive industry leaders ahead of retirement and price analysis by market research company JATO Dynamics.
Tavares, who had led Stellantis since it was created in January 2021 from the merger of Peugeot-owner PSA and Fiat Chrysler, had convinced investors with a rapid reduction in costs after the merger and increased operating profit to 13% last year, almost twice theirs. of rivals Volkswagen and Renault.
But his bright start came to an end after declining sales and marketing in the lucrative North American market led the group to issue a profit warning in September and later announce he would retire in 2026.
While investors focused on Stellantis’ well-established American flagship, the group is also struggling in its European region, a Reuters analysis shows.
Under the leadership of Tavares, Stellantis lost a third of the market in Europe. In the same period, Fiat’s market share in Europe fell to 1.8%, while Citroen fell to 2.2%, data from the European car association ACEA show.
Stellantis’ top investor is the Fiat-founded Agnelli family through the investment company EXOR led by John Elkann.
The group said on Sunday it had accepted Tavares’ “immediate” resignation and that Elkann would chair a new interim committee. Milan-listed shares were down 7% at 0834 GMT, the lowest since July 2022.
European car dealers who spoke to Reuters point the finger at Tavares’ performance and margins.
“Low prices have been missing from Stellantis,” says Alberto Di Tanno, founder of the Intergea retail group, which manages 160 stores in Italy and Switzerland.
For example, the Ypsilon model from Lancia, one of the 10 Stellantis brands found in Europe, “was a car for 17,000 euros. Now, suddenly, it costs less than 25,000 euros,” said Di Tanno.
In September, the average selling price of a Stellantis passenger car in 14 eurozone countries stood at around 40,000 euros, above the average for other competitors in the main market, JATO Dynamics data provided to Reuters shows.
Cars from China Saic, owner of the British brand MG, went for 32,500 euros while Renault, Mitsubishi and Suzuki models cost on average less than 29,000 euros.
From 2021, prices on Stellantis have increased in each of the five European markets – Germany, France, Italy, Spain and the United Kingdom. Hyundai and Toyota also raised prices in these markets, but Volkswagen and Renault cut them.
“Prices for the Stellantis brand are rising, but consumers are still looking at many of them as a mass market,” said JATO Senior Analyst Felipe Munoz.
The former head of sales at Stellantis told Reuters that the high price, as well as the reduction of costs, was part of Tavares’s push for two digital currencies, especially after the Covid pandemic.
Stellantis’ problems in Europe reflect some of the issues the company has been grappling with in North America with the high-end Jeep brand.
Erin Keating, senior analyst at Cox Automotive, said buyers were shocked by the fact that Jeeps that sold for $35,000 in 2019 shot up to $60,000 this year, with some models already priced at over $100,000. The price of these models was hard to swallow for many buyers who prioritized Jeeps for their ruggedness and versatility.
“He chased profits. They shot up car prices, and I think what he forgot to do was look at, ‘Who is my US customer?’ ” Keating said of Tavares.
Stellantis told Reuters that it plans to launch 20 new models in the coming months, in all segments, aiming for a 20 percent market share in the European Union.
This includes the Citroen C3, which starts at 23,000 euros in its electric version but costs less than 15,000 euros with a hot engine.
FAILED AMBITION
Like other European automakers, Stellantis’ problems in Europe were compounded by fierce competition from Asian rivals, including from Hyundai and Toyota.
Chinese carmakers including BYD, which together account for 5% of auto sales in Europe and could command a 12% market share by 2030 according to consultancy AlixPartners, have rejected Stellantis’ offers.
The small Fiat 500, which has always been associated with expensive travel, is being sold exclusively as an electric car, for 29,000 euros.
“(Stellantis’) prices are not right,” said Tony Fassina, founder of one of the largest car dealerships in Milan, Italy. “At the right price the demand is there.”
Herman Claes, chairman of the Stellantis Retailer Association of Belgium and Luxembourg, said many Stellantis dealers in the region have started offering other marques to compensate for slow sales, to help the Chinese automaker.
The complexity of the group has also become a problem.
With 14 brands worldwide, Stellantis owns the largest number of brands among traditional car manufacturers. After tearing down Porsche in 2022, Volkswagen operates nine models. Toyota has only three.
Stellantis’s wide portfolio failed to ensure that the products were clearly differentiated: Fiat and Citroen compete in the cheap segment, Jeep and Alfa Romeo in the high end.
To save money, Stellantis’ mid-size cars are being built on the STLA Medium technology platform, while the smaller cars use Peugeot’s CMP platform.
“Many of the Stellantis brands are complementary,” said Plinio Vanini, owner of Italy’s largest auto dealer group Autotorino.
($1 = 0.9477 euros)
(Reporting by Giulio Piovaccari in Milan, Alessandro Parodi in Gdansk and Inti Landauro in Madrid; additional reporting by Gilles Guillaume in Paris and Nora Eckert in Detroit; writing by Giulio Piovaccari; Editing by Lisa Jucca)
