Brand Management
Too Many Brands Spoil the Profit
Stellantis has finally drawn a plan to deal with its several brands. Let’s take a look at how they are now and what they could do
Brands are a tricky marketing strategy to use. They can provide a separate, independent image which helps the parent company conquer new market segments but, since we are talking about designing a new image from scratch, they also require large investments and usually bring results after many years — if they actually do it.
When a company establishes a new brand, the procedure generally consists of concentrating innovative ventures on it while keeping the original brand only with proven products. The company uses one department to fund the creation of the other until the latter gets on its feet and it ends up having two branches thriving independently.
Things get complicated when the new brands are inherited: the merger of two companies brings the need for rearranging the brands of both sides in order to make them live peacefully in the market. Having that in mind, it is difficult to imagine how much work Stellantis has ahead of itself given that it comes from four different automakers.
From foes to friends
Even though the former Chrysler, Fiat, Opel and PSA had completely different backgrounds, they used to be independent: it is natural that they competed at some market segments. Making them play for the same team implies the need for eliminating internal conflicts as soon as possible without losing the image each one built over time.
The first is relatively easy to execute: some models are discontinued without a successor, others are updated with complex character changes and, later, new cars come to conclude the transition. The parent company must visualize each brand’s situation today so as to plan which changes will prevent their market projections from intersecting.
On the other hand, how do you make DS an actual threat to the German trio? How could Fiat offer more profitable car models? How could Dodge offer high performance at low cost? How could Opel fight in countries where the former partner Chevrolet had always been favored? Sometimes, a brand’s potential is hindered by its own image.
A decade or nothing
Stellantis has decided to face that issue head-on: CEO Carlos Tavares said that each of its struggling brands will have funding for ten years to make it work. They will get strong CEOs to work on “promise, customers, targets and brand communications. […] Each brand is given the chance to do something different and appeal to customers.”
While that applies to many brands, each one should use that opportunity in a specific way. They are going through different moments when it comes to car lineup, sales figures, competitiveness in the market, and long-term prospects, so the appropriate plans will vary as well. They all have to work together so as to make the group prosper.
This article groups Stellantis’ automotive marques according to their situation in the global market and makes suggestions about what could be done to save them as part of the new group. Since they are merely ideas of the author, they are more than open for discussion with your own thoughts and opinions using the comment button below.
The successful ones
Let’s start by taking Fiat, Jeep and RAM out of the way. They have managed to make such good use of the current market trend that the first one has become the top seller in Latin America, the latter has grown fully independent from its parent brand Dodge, and the third one left North America to expand its image all around the world.
After years focusing on compact cars, Fiat decided to move to more profitable market segments while using its oddball character to avoid directly competing with the traditional models. In nowadays, three of its best-selling cars are the Mobi supermini and the Toro and Strada pickups — the latter is the best of the whole Brazilian market.
Things were easy for Jeep because it was already focused on off-road models, so adapting it to the current SUV trend was a rather simple operation. RAM, in turn, has managed to stand out in the heavy-duty market thanks to its opulent and typically North-American image; most of its rivals are directly focused on the professional customers.
The generalist ones
The former PSA group acquired vast experience with brand management over the last decade by giving Citroën and Peugeot clearly independent images and making room for the whole new DS above them. That will come in handy now that they have to include Opel/Vauxhall in their plans while avoiding internal conflict with all the others.
Citroën has already found its new path by honoring its innovative character; it now offers a young, playful identity. Things are different with Peugeot and the ex-GM duo because both were shaped to become premium generalists such as Volkswagen. Ironically, an interesting solution for them is to work in a similar way as the German maker.
In that group, the main brand takes only part of the generalist market and lets SEAT and Škoda attract the others. With Citroën taking the low-budget folks, Stellantis could focus Peugeot on the performance-oriented ones and set Opel and Vauxhall to showcase new technologies, especially about electrification. What do you think of that?
The traditional ones
Building image around tradition is not easy as it seems. While it provides a lot of references at first, it also imposes even more restrictions later. Alfa Romeo, Chrysler and Dodge are among the most respectable brands in the automotive history, but currently sell a total of eight models — and that is already pushing the limits of their images.
Alfa Romeo used to be a racing icon but failed to make the 4C coupé prosper; Chrysler established itself with a mix of innovation of luxury, but the Pacifica and the 300 have neither of that; and Dodge shows itself as a guardian of the North-American muscle cars but does that with a sporty sedan, a sporty SUV, and a 15-year-old coupé.
Since history is so important to them, they should get it together: Alfa Romeo could become the “grand tourer” branch while leaving ostentatious sportiness to Dodge. Chrysler, in turn, could become a regular mid-luxury brand slotting the trio mentioned before and below Maserati, which would certainly help the next group to appear here.
The disoriented ones
If life is already difficult for brands which have a clear(ish) direction to follow, what about DS, Lancia and Maserati? The first one releases model after model trying to find itself; the second offers literally one car model in one country, although it does it very well; and the third has not truly made itself present in the high-luxury market yet.
Maserati’s image is strong enough to defend Stellantis even from the German references: all it needs is a quality boost and leave the lower part of the luxury market to Chrysler. DS could use its French flair to become a subversive alter-ego of both, concentrating unconventional body styles and new technologies of uncertain market reception.
And what about Lancia? That division has such a rich history that it is safe to say that its image allows it to venture into many different market segments as long as receives truly competitive products. It is easy to envision it selling from the Fiat 124 Spider’s successor to a small version of the Chrysler Pacifica. And, hopefully, not only in Italy.
Once again, it is worth mentioning that this article is simply a compilation of ideas from an enthusiast who likes to read about the automotive universe and makes conjectures every now and then. Now, it is time for you to share yours: how do you think Stellantis could coordinate its vast portfolio of brands? Use the comment button below!
