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Outside of the stronger profile of the combination of finances, there's no impact to the North American business which been undergoing a transformation started by legendary Sergio in about 2015. Under Sergio, the North American business with 2015/2016 slashed sales to fleets (especially rental sales), overhaul dealer wholesale payment formula ,and cut unprofitable products (200 and Dart) in what turned out to be long-term declining vehicle categories.
On top those actions ,Sergio and his team at FCA went after ''Money left On The Table '' opportunities regarding Grand Cherokee, Wrangler and RAM. ''Money left On The Table '' opportunities included price, options & equipment, features , trim levels & packages ( including special editions), configurations (RAM Crew Cabs, Grand Cherokee L with 3-rows, birth of Gladiator), mix of configurations, overall mix, dealer allocations , and stimulating demand for these products as well huge investments in Capacity to build these products (Grand Cherokee, Wrangler, Gladiator RAM and family of Wagoneer ).
These actions all together have created strong Average Transaction Prices, among the highest mass marketed, which driven EBIT Profit margin (Earnings Before Interest and Taxes) higher than 10% (Sergio's target) and resulted in highest profitability for an OEM in North America. The addition of the Wagoneer family will further enhance the profitability of the North America unit.
The actions have taken place with the U.S. buyer moving away permanently from the traditional small & midsize passenger car categories which enhance the results of the actions strengthening the North American business for long-term health as the products categories focused on by the 2025/2016 direction can better handle new technologies while preserving profitability & value prospection of the models and brand DNA. Product categories like the traditional midsize passenger car category faces total extinction with ''the storm'' of new technology such as infotainment, driver aids, and Electric adds cost which in-turn changes the value prospection in such a point where there's no marketability to the category .
So to recap Sergio & his team achieve best in region profitability ,they also set the company up in North America to weather the ''storms'' of economy/social/tech. The wacky ''fantasy'' that PSA products in the A/C/D traditional segments in Europe would be modified & federalize by a cost-cutting CEO (Carlos Tavares) is peak lunacy (and base on what that same crowd
recently stated on ''that other website'' there's some that don't understand the difference between EBIT or after tax profit vs revenue which is downright funny).
Carlos Tavares is focusing on reducing build cost/cost of goods/material cost which if successful without harming the commercial appeal of the products will only lead to bigger EBIT Margins likely in the Mid-teens in North America. As focusing on margins continues, Stellantis won't invest in poor segments, and will invest in all things Electric technology.”
moparinsiders.com
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