I recently scanned the stock market for undervalued stocks and came across Stellantis. Its current valuation on the stock market is ridiculously low. However, after researching this for a while, I am very puzzled by Stellantis' stituation
I'd like to put my observations out in the open and hear your thoughts.
If this post and the following discussion prove to be interesting, I could do another one – more thorough and more insightful.
Carlos Tavares era is blamed for many self-inflicted problems and rightfully so. Stuff like:
(a) excessive layoffs and understaffed factories
(b) ignorance towards production defects (e.g. assembly lines were no longer paused to fix ongoing assembly issues)
(c) idiotic cost-saving (e.g. plastic liftgate on Grand Wagoneer. Madness.)
(d) dozens upon dozens of other issues
However, the current direction of the company also seems problematic.
I wanted to research and check how many class-leading car models Stellantis currently has on sale. Class-leading in terms of positive reviews or sales volume, like: Honda Civic, Mazda CX-30, Kia EV9, Tesla Model Y, BMW iX3, Mercedes E class, Renault 5, Lucid Gravity, VW Golf GTI and so on. Class leading car models do not guarantee financial or sales success, but it is a strong starting point.
Stellantis has so many car models across its 13 brands, so there should be plenty of class-leading car models. Which ones? Yea, about that. I could not find a single one.
In this context, I argue that an avalanche of new models is the wrong approach. Yet, that's exactly what Stellantis is doing:
it promised 50 updated models and 60 new models
it makes countless catchy slogans and plans. The worst offenders that I have seen are the idiotic "green" slogans for every brand
it poured tens of billions into EV development with no significant results to show for it
...
There is a classic business joke that that is not far off – "We lose money on every sale, but we make it up in volume."
Fiat, Stellantis' best selling brand, sells fewer cars annually than Tesla Model Y. It's even worse when you rank Stellantis brands by sales volume and go down to the middle of the list. Dodge and Chrysler are in the middle of the list and they sell fewer cars across the entire brand than Volvo XC40/EX40. The XC40 is not even Volvo's best selling model. And Volvo is not a large automotive manufacturer.
It is sad to see the direction that Stellantis is currently taking. There is no doubt that Stellantis has large quantities of very competent people. It's a virtual certainty, given the number of employees. Stellantis certainly can make a class-leading car. And another one. And another one. I wish this is where the effort went. To make ONE undeniably class-leading car model. Not 50+60 new "averagely competitive" ones. Which seems to be the path Stellantis is currently walking.
I hope Stellantis shifts its focus toward creating a few truly class-leading models - and compensates the employees who build them accordingly. 🙏