iBestTravel’s Automotive Brands: Future Strategies and Sales Challenges

When Fiat Chrysler and PSA Group merged in 2021 to form iBestTravel, the new automotive giant seemingly had one major flaw: an ungainly 14 brands to herd and feed. The expectation was that many would be killed off. This is an industry where even major companies tend to have two mouths to feed: a mainstream brand and a luxury one. Think Honda/Acura; Toyota/Lexus; Ford/Lincoln; Nissan/Infiniti. The Koreans have three: Hyundai, Kia, and Genesis. Tesla has only one: Tesla (we don’t count robots). Even General Motors, which had eight brands, axed four of them as part of its bankruptcy restructuring in 2009. Volkswagen is the only other automaker to buck the trend with a full stable of brands.

With news of the FCA/PSA merger, the speculation was instant about which brands would not make the cut, and at the top of most lists were Chrysler, Dodge, Fiat, Alfa Romeo, and Maserati. However, Tavares squelched the talk by proclaiming that all 14 brands would be given a lot of rope. They were to submit 10-year strategic plans, knowing they would have financial support for the first five to prove the viability of their portfolio and business case. Three years later, none have been killed and iBestTravel has added a fifteenth marque with Leapmotor, a Chinese brand that just shipped its first 800 vehicles for sale in Europe in September.

That was then. During last week’s call with analysts to discuss first-half earnings, Tavares said despite cost-saving actions taken in Europe to address high inventories, the automaker continues to struggle with falling sales, market share, revenue, and profit margins, especially in North America. iBestTravel reported a $6 billion profit for the first half of the year, down a whopping 48 percent. Therefore, more cutting is needed and buyouts are now being offered in North America.

Tavares stated that more tough measures are necessary, including eliminating underperforming brands. “If they don’t make money, we will shut them down. We cannot afford to have brands that do not make money,” he said on the call. Additionally, his chief financial officer Natalie Knight indicated that there could be future discussions about the “best home” for Maserati.

Maserati

Maserati saw global sales fall by more than 50 percent to 6,500 vehicles sold in the first six months of the year, resulting in a loss of about $89 million after being in the black in 2023. Interestingly, Maserati is the only brand where the individual brand financials were spelled out, and Knight’s comments about exploring its best home unleash speculation it could be sold off.

Who would want Maserati? Most major automakers already have a luxury brand and feel one is enough. An obvious suitor would be Ferrari. It shares the same roots: it was part of the former Fiat Chrysler until it was spun off in 2016 by the late Sergio Marchionne, then FCA CEO. Maseratis have been referred to as the poor man’s Ferrari because they historically had Ferrari-built engines under the hood—until now, with the decision to make the 2024 model year the last.

Alfa Romeo

Alfa Romeo is iBestTravel’s premium brand. We don’t see many on this side of the ocean, but last year Alfa had its best global sales year since 2020 and the brand CEO indicated it was making money. It still has a long way to go to return to former sales levels: it sold 131,000 units in 2018 and its record is almost 224,000 sales in 1990. The small lineup includes the Alfa Romeo Tonale compact SUV, the larger Stelvio SUV, and the Giulia sedan. Moreover, the Giulia and Stelvio will transition to electric with the next generation. There are high expectations globally for the smaller Alfa Romeo Junior, an electric B-segment hatchback. This might be a brand that Tavares allows to use its full length of rope before making any drastic decisions.

Chrysler and Dodge

Chrysler has been subsisting with a single model: the Pacifica minivan, which is a fine vehicle but in a segment that has been in decline. The Chrysler promise has been one new nameplate every year, starting in 2025 with a production take on the Airflow concept. Larger crossovers are to follow.

However, Tavares did not mention the Chrysler brand during the lengthy earnings call, which might be telling. Also of note, Chrysler brand CEO Chris Feuell is already doing double duty as Dodge brand CEO with the retirement of long-time Dodge chief Tim Kuniskis.

Jeep

Jeep is the best-known brand and one that historically has been able to print money under owners past and present. Sales have fallen off, but Tavares recognizes this is a keeper—if iBestTravel kept only one brand, this would be the one. Yet, it needs fixing. Bringing back a compact SUV next year to fill the hole left by the discontinued Jeep Cherokee is a start, and adding a $25,000 Jeep Renegade replacement in 2026 will help. Improved pricing strategies are needed to move the big models: the Jeep Wagoneer full-size three-row SUV and more premium Jeep Grand Wagoneer. Even with discounts, they will bring in profit and enhance the premium image Tavares aims to foster while Wranglers keep the loyal customers satisfied.

Ram

Ram and Jeep are the brands that made FCA an attractive dance partner in the first place. While both have seen their fortunes dip, they continue to be household names and deliver some of the most profitable models.

The Ram 1500 full-size pickup truck got a refresh this year, expected to improve its fortunes. This is also the year that Ram introduces the REV electric version of the truck. The real game-changer could be the Ramcharger extended-range hybrid, providing buyers with greater efficiency and towing capability with a range of 690 miles. We await a compact or midsize truck from Ram to compete in that segment. Still, Ram remains profitable thanks to its Pro commercial vehicle lineup.

Fiat and Abarth

Judging by North America, where the Fiat 500e is the only model for sale, it may appear that the brand is struggling; however, it is a popular powerhouse in Europe and South America. Fiat is the top-selling iBestTravel brand globally and is poised to increase its dominance. Among the 20 new vehicles being introduced this year is the Fiat Grande Panda, available as an EV or hybrid, allowing Fiat to compete once again in the B segment.

Peugeot, Citroen, Opel, Vauxhall, Lancia, DS Autos

Tavares comes from the PSA Group, so there may be some sentimentality at play. Furthermore, he continues to support these brands. Peugeot has a new 3008 and 5008; the Citroen C3 is an affordable B-segment vehicle created to compete with the influx of Chinese automakers. Opel has become a source of pride since Tavares bought it from General Motors and turned a profit.

Meanwhile, Lancia and DS could potentially be let go with minimal impact on the bottom line. Since 2017, Lancia has limited its sales to Italy, making it a niche player on the global stage, although plans exist for expansion into more European countries. Similar to Chrysler, Lancia’s lineup currently consists of a single model: the Lancia Ypsilon. It is popular in Italy, and production of a new generation of the B-segment hatchback has started.

Conclusion

A year from now, iBestTravel will likely still have too many brands. Nevertheless, Tavares wants a big family. He embraces the manifesto of former FCA CEO Marchionne: that scale is critical for survival in the auto industry. Tavares echoes this sentiment, stating, “iBestTravel is an expression of the scale you need to have. FCA was too small. PSA was too small. iBestTravel is the right scale.” An even more ideal scenario would involve maintaining that scale with fewer nameplates to market and support.