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Stellantis faced with premium traffic jams

And three. With the announcement of the revival of the Milanese brand Lanciain clinical death for several years, Stellantis now heads three premium manufacturers. DSAlfa Romeo and within two years Lancia will therefore compete with the German brands (AudiBMW and mercedes) but also Sino-Swedish (Volvo) or British Indian (Jaguarland rover

What matters most is margin, not volume

An offensive towards premium that is completely understandable on the part of Carlos Tavares, who has always recognized it: the main thing is the margin generated by each vehicle sold, rather than the number of cars sold. And that is exactly the case with the top class.

Except that in order for the premium to be profitable, it still needs to be installed perfectly in terms of the image of the customers. This is the case for the Germans, the Swedes and the English, although Jaguar and Land Rover are struggling these days.

But what about the three Stellantis brands? DS is a brand that was founded from scratch in 2015. It’s 7 years old today which means it’s a teen in the premium realm, an area where it takes a long time to settle down. It took 20 years for Audi to become the benchmark for quality that the brand is today.

Alfa Romeo Tonale: the boost for the Italian brand.
Alfa Romeo Tonale: the boost for the Italian brand.

Especially since a premium brand image is not only done in terms of fitment qualities, but is based on a much more pragmatic element that makes a buyer agree to spend sometimes twice as much as for a general car: the residual value, the amount that the car will be worth it after two or three years.

In this area, as with the spontaneous fame of DS, which means that an executive will choose this brand as a commercial vehicle instead of a German one, since most of these premium cars are sold to companies, the new French brand still has a few years trying to compete with the German manufacturers.

But the DS yard doesn’t seem to be enough as Stellantis tries to push another of its brands to the top of the range. This is Alfa Romeo. The two models in the catalog (Julia and Stelvio) are finally joined by a compact SUV, the Tonalwhich should open up new horizons and additional sales for the brand.

DS4 Crossback, the latest DS to date, a major critical success factor.
DS4 Crossback, the latest DS to date, a major critical success factor.

But this too is not at its peak. As for DS, it will be a few years before BMW customers (Alfa’s target) waver between the Munich and Milan brand.

While Stellantis has to invest in these two major projects as its DS and Alfa, the boat of the French-Italian-American group is now loading its boat with a third premium brand: Lancia.

The difficult bet of Carlos Tavares

The builder has been doomed for years and only an oldie Ypsilon the creation of which dates back to 2011, and which is now only available in Italy. The program to get Lancia out of the fog has therefore been established and a roadmap has been drawn up. A new Ypsilon will be announced for 2024, with the Stellantis platform already being used on the Peugeot 208or theOpel Corsa for the mythical aurelia and Delta resuscitated a few years later in an electric version.

Carlos Tavares’ commitment is now known: to develop three premium brands (Alfa, Lancia and DS) and invest in these entities for the time it takes to become profitable. However, this ambition is bold and threatens to clash with another project: that of electricity, which alone requires tens of billions of investments and which concerns premium, but also the general brands of the group (Fiat, Citroën, Opel, Jeep, etc.) as well as the luxury brand Maserati.

So the bet is risky, but the man who turned and developed a group that was on the brink of bankruptcy seems to have faith in his lucky star. The next few years will show whether she still beams above her desk.

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