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Stellantis ( STLA ) operates 14 brands, more than major rivals

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Chairman Elkann steering while search for new CEO goes on

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Slumping sales, margins led to ouster of CEO Tavares

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Company will report full-year results on Wednesday

By Giulio Piovaccari

MILAN, Feb 24 (Reuters) - As Stellantis

chairman John Elkann interviews CEO candidates, deciding how

many of the automaker's 14 brands have a viable future is a

significant priority.

The French-Italian company's sprawling portfolio - the

largest among its peers, which mostly focus on one or two brands

- reflects its origins in a 2021 merger of Fiat-Chrysler and

Peugeot owner PSA. Shrinking it could reduce complexity and

allow some marketing, development and sales functions to be

merged.

But each brand - from bestsellers like Jeep, Ram and Peugeot

to struggling DS, Lancia and Alfa Romeo - has its fans, making

which to drop a difficult choice.

In Europe, for example, where Stellantis ( STLA ) is the

second-largest carmaker after Volkswagen, its top-selling

Peugeot marque had a market share of just 4.9% last year, or

eighth position overall.

Low consumer recognition of the Stellantis ( STLA ) corporate name,

unlike rivals such as VW or Toyota ( TM ), is another handicap.

A source familiar with Elkann's thinking told Reuters the

topic was a priority, and that any applicant for chief executive

without an idea about the brands "is not the right candidate".

Former CEO Carlos Tavares often said traditional automakers

faced a "Darwinian era" where the weakest would fail - while

insisting all Stellantis' ( STLA ) brands had a future.

When Tavares was forced out in December, Elkann moved fast

to rebuild investor confidence hurt by slumping sales and profit

margins in the U.S. market, traditionally its most profitable,

with the Jeep, Ram, Chrysler and Dodge brands.

The world's fourth-largest carmaker globally by sales has

performed less well in Europe, while it closed a Jeep-making

joint-venture in China almost three years ago and has no plans

to push for a relaunch as opportunities there recede.

The new CEO must "be ready to take strong decisions", said

Fabio Caldato of Acomea SGR, which owns Stellantis ( STLA ) shares.

"If I am not thinking with my heart, but as an investor, I

would see it as very positive that the new CEO is determined to

review the brand portfolio," he said.

Brands seen by analysts as vulnerable to a portfolio

reshuffle include premium marques Alfa Romeo, DS and Lancia.

Dodge and Chrysler are seen as survivors despite a less than

stellar performance, as they have U.S. driver recognition and

appeal to specific market segments.

Automakers have traditionally dropped famous brands only

reluctantly, as when GM axed Saturn and Pontiac and Ford its

Mercury nameplate during the late 2000s recession.

In a statement to Reuters, Stellantis ( STLA ) said each of its

brands had plans for new products and that recent organizational

changes were aimed at supporting them.

"Stellantis ( STLA ) is focused on providing even more choices to its

customers, leveraging on the deep history and strong identities

of its 14 brands," it said.

"MAGIC WAND"

A Stellantis ( STLA ) source said the portfolio's problems are known

internally, but that individual brands' popularity in particular

countries or segments meant it was not obvious which to cut.

Jeep and Ram are Stellantis' ( STLA ) U.S. best sellers, while

Chrysler - now largely confined to the Pacifica minivan - and

Dodge sold less than 150,000 units apiece in the country last

year. Dodge's product lineup has dwindled to one muscle car, the

Charger, along with a sporty crossover and one SUV.

Jeep accounted for at least 15% of Stellantis' ( STLA ) global sales

in 2024, according to Reuters calculations, and Chrysler and

Dodge around 3% each.

"If I were to have a magic wand ... I'd probably say Jeep

should absorb Chrysler and Ram should absorb Dodge," said Erin

Keating of research firm Cox Automotive.

"But you're not saving a ton of money," she added, as the

four "each have their own brand equity", complement each other

in terms of range and share the same dealers.

Stellantis ( STLA ) was fifth in the U.S. market by sales last year,

with an overall share of 8.1%, losing the No. 4 spot to Honda ( HMC )

after price rises cost it clients, leading to the shock profit

warning that precipitated Tavares' exit. Jeep ranked 11th as a

single brand, with a market share just below 4%.

Keating said the company's focus now should be getting

pricing back into line with what customers are willing to pay, a

view also expressed by U.S. dealers.

"Let's figure out a way to build those iconic brands back,"

said David Kelleher, who has a Chrysler-Dodge-Jeep-Ram store

outside Philadelphia.

EUROPEAN CHALLENGE

Europe, where Stellantis ( STLA ) - slow to electrify - faces

stringent carbon emissions rules and more Chinese competition,

could be a bigger challenge.

"It would be a problem if Stellantis ( STLA ) closed brands," said

dealership owner Tony Fassina, who sells Fiats and Alfa Romeos

in Milan. "It would mean losing sales for sure."

Marco Santino at consultancy Oliver Wyman said Stellantis ( STLA )

marques such as Peugeot and Opel overlap in Europe's mass-market

segment, while it is struggling in the premium market.

Europe-focused Alfa Romeo, Lancia and DS each took only a

0.3% market share in the region in 2024, far behind rivals

including Audi and BMW. In comparison, Peugeot made up a fifth

of the company's global sales.

Alfa could become a niche sport brand as the fanbase for its

cars ages, Santino suggested. Any broad repositioning to revive

the premium marque "you need to do ... from scratch".

Stellantis ( STLA ) aims to launch about 20 new or updated models

between late 2024 and 2025, mostly EVs and hybrids including the

Citroen C3, expected to be the most affordable European-made EV.

Its JV with Leapmotor, sometimes described as Stellantis' ( STLA )

15th brand, under which it can sell, import and manufacture

Leapmotor's EV models outside China, could be a further boost to

electrification.

Fiat, Stellantis' ( STLA ) global bestseller, is popular in emerging

markets such as Brazil or Turkey, and in the European city car

segment with the 500 model. It could be focused on affordable

models, Santino said, while another brand could shift to focus

on EVs.

"Markets are changing fast and less predictably than we

thought," Santino said. "Maybe not yet, but within a few years,

the time will be ripe for Stellantis ( STLA ) to close some brands."

(Additional reporting by Nora Eckert and Kalea Hall in Detroit,

Alessandro Parodi in Gdansk; Editing by Catherine Evans)