According to Reuters, a Reuters interview with car dealers and auto industry executives before Carlos Tavares stepped down as CEO of Stellantis, as well as a survey of pricing data by market research company JATO Dynamics, showed that one of the problems troubling Stellantis was that the rising prices of mass-market models scared away customers affected by inflation.
Under Tang Weishi’s leadership, Stellantis lost 1/3 of its market share in Europe.
Fiat’s market penetration in Europe halved to 1.
8 per cent and Citroen’s to 2.
2 per cent, according to the European Automobile Manufacturers Association (ACEA).
European car dealers interviewed by Reuters blamed Tang’s focus on efficiency and profit margins.
Alberto Di Tanno, founder of dealer group Intergea, which operates 169 dealerships in Italy and Switzerland, said: “low-cost models are gradually disappearing from Stellantis’s product line.
For example, the Ypsilon model under Stellantis’s Lanqi sub-brand used to sell for 17000 euros, while the current model sells for no less than 25000 euros.
” In September, the average retail price of a Stellantis passenger car in the 14 largest countries in the euro zone was close to 40, 000 euros, higher than the average price of its competitors in the mass market, according to JATO Dynamics.
By contrast, the average price of SAIC Mingjue is 32500 euros, while that of Renault, Mitsubishi and Suzuki is less than 29000 euros.
Felipe Munoz, a senior analyst at JATO, said: “the prices of Stellantis’s car brands are rising, but consumers still believe that many of these brands are for the mass market.
” Since 2021, prices of Stellantis models have risen in Germany, France, Italy, Spain and the UK, the top five European markets.
Hyundai and Toyota have also adjusted their prices in these markets, but Volkswagen and Renault have cut their prices.
According to a former senior sales executive at Stellantis, a higher pricing strategy and aggressive cost-cutting plans are part of Tang Weishi’s strategy to push Stellantis to achieve double-digit operating margins.
However, sales of Jeep, Stellantis’s North American luxury brand, fell due to higher prices.
“the retail price of the Jeep model exceeded $60, 000 this year, up from $35000 in 2019,” said Erin Keating, executive analyst at Cox Automotive.
Some Jeep models even sell for more than $100000, which is shocking and unacceptable to consumers.
Tang Weishi chased profits, driving up the price of Stellantis cars.
But I think he forgot to think about consumer positioning.
” Photo: Stellantis, while Stellantis, like other European automakers, faces fierce competition from Asian competitors, including Hyundai and Toyota.
Chinese carmakers together account for about 5 per cent of European car sales and could account for 12 per cent of the European market by 2030, undermining Stellantis’s product competitiveness, according to consultancy AlixPartners.
In addition, Stellantis has 14 brands worldwide and is the traditional carmaker with the largest number of brands.
However, Stellantis’s broad product portfolio fails to ensure that the company’s brands are significantly differentiated.
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