For Stellantis, the world’s fourth-largest carmaker, these are dangerous times. This year, the company expects a loss from tariffs to reach an eye-popping $1.7 billion. The company—formed from the merger of Fiat Chrysler and PSA Peugeot more than four years ago—has proved remarkably indomitable. In the first half of 2023, it took on 300 million euros (around $350 million) of the anticipated tariff effect. It’s a good sign to see Stellantis addressing these economic challenges head-on. Simultaneously, the company is restructuring its U.S. business to ensure a more stable, profitable future.
In the first half of the year, Stellantis tumbled to major red ink of 2.3 billion euros, almost $2.7 billion. This shocking financial loss called for swift action from the company’s executives. That’s a percentage of the company’s 16 million car total, even when you limit it to the U.S. market. That’s 8 million produced in US domestic plants, and 4 million produced in Canada and Mexico. In fact, these vehicles produced overseas have the highest domestic content. Here’s the rub – Stellantis imports 4 million cars a year from Europe and Asia, most of which have zero U.S. content.
Impact of Tariffs on Production
Of the major automakers, Stellantis has been hit hardest with a nearly 25% plunge in its U.S. shipments. This decrease is largely attributable to imports from foreign manufactures decreasing overall. Mitsubishi Motors Mitsubishi Motors Corporation Mitsubishi is in favor of U.S. President Donald Trump’s plan to increase job creation and domestic production of autos. They are using tariffs as a primary weapon to do so.
Antonio Filosa, the chief executive of Stellantis North America, expressed his opposition to the tariffs. In particular, he pointed to their possible effect on vehicles made in Canada and Mexico. He stated, “We are in talks with U.S. officials on how to mitigate the impact of tariffs.” We hope that Stellantis is indeed in strategic planning mode. Their goal is to strike mutually advantageous deals between the operator and the larger market.
Revitalizing U.S. Operations
To strengthen its position in the U.S., Stellantis is relaunching previously shelved models, including a new Jeep Cherokee and the popular ICE Dodge Charger, scheduled for release in late 2025. This move signals a renewed commitment to meet consumer demand and stay competitive in a rapidly evolving automotive landscape.
Filosa emphasized the importance of proactive measures to counterbalance tariff impacts. “We are using tariffs as a tool… so we can totally offset the tariffs effect.” He underscored the necessity for decisive actions to restore profitable growth within the company. “We will continue to make the tough decisions needed to reestablish profitable growth and significantly improve results.”
Looking Ahead
Stellantis is determining its own future by navigating a shifting market. Simultaneously, it is dealing with a lot of financial pressure from tariffs and challenges in production. The company’s fortunes are now inextricably tied to the smart, strategic decisions it makes over the next three months. These decisions are exceedingly important to returning production and profitability to the ever-more competitive U.S. automotive industry.
