Parent company of Fiat and Jeep, Stellantis aims to grow in South America

RIO DE JANEIRO, BRAZIL – Fiat Chrysler has moved from dominance to greatness in some of the world’s most unpredictable automotive markets following this year’s merger with Groupe PSA, manufacturer of Peugeot and Citroën.

Since closing the deal to form Stellantis NV in January, the auto giant has been busy finding ways to leverage its large presence in South America, said Antonio Filosa, the group’s president in the region.

Provided demand remains relatively stable, Stellantis will have no problem sustaining its considerable industrial park, he said.

Stellantis combined last year’s best-selling carmaker in the region -Fiat Chrysler- with another outside the top 10, PSA. The group has a much larger presence in South America than in Asia and is on the offensive while other automakers pull back, most notably, Ford Motor Co. which shut down production in Brazil after more than a century here.

“Latin America presents an external scenario of great challenges,” Filosa said, citing in particular the “very severe” volatility of the exchange rate. To better tackle the ups and downs, Stellantis will make better use of production facilities, including 6 plants, and consolidating its supply chain.

Gaining market share

About 75% of Fiat and PSA’s suppliers were common to both, Filosa said. Streamlining the remainder, as well as adding efforts in advertising and other contracting services, will free up resources and help the group gain more market share.

Peugeot and Citroën are growing despite the absence of new products and should reach a combined market share of about 4% in the next two years, he said.

In the first five months this year, Stellantis’ market share in South America rose to 23% from 19.3% in 2020 and 16.7% in 2019, according to the company. In Brazil, the region’s largest car market, the company controls just over a third of the market.

South America is slowly progressing toward fleet electrification, with Filosa estimating that the region is at least 5 or 6 years behind Europe in the shift to hybrid and electric battery vehicles. Stellantis will experiment with importing electrified models and assess projects to localize some technologies in the region, he said.

Brazil’s ethanol is an environmentally friendly alternative until electrification becomes established. Measured from well to wheel – including fuel production, processing, and distribution along with actual use – the amount of carbon dioxide generated is “about the same” as electrified vehicles, Filosa said.

Source: Infomoney