Stellantis eyes top light-commercial vehicle company
The maker of Ram, Jeep, Dodge and Chrysler vehicles has set its sights on becoming the world's top light-commercial vehicle company, but it's going to face some major obstacles to get there, experts say.
Seeking to double its revenues by 2030 to more than $320 billion, Stellantis has identified commercial vehicles as one of seven accretive business units. Other automakers, however, also are emphasizing the market: General Motors Co. launched the BrightDrop electric commercial van brand in 2021, and Ford Motor Co. — the leader in North America and Europe last year in LCVs, according to consultant Mordor Intelligence LP — has made its Ford Pro business a key piece of its growth strategy.
“For all three companies, these aren't vehicles for fun,” said Stephanie Brinley, principal automotive analyst for the Americas at S&P
Global Inc. “They're something to the effect of the lifeblood of the company. We need these companies to get work done: to move transit, to keep the power on, to get the goods where they need to go, to get you when you need to get to the hospital. It's not an understatement of what those vehicles are to our lives.”
That makes these commercial customers desirable. Plus, they're likely early adopters as automakers face more stringent carbon-emission regulations. Delivery vans often are on consistent routes that reduce range anxiety risks. All-electric models can save on fuel costs.
Stellantis, which already sells electric and hydrogen fuel cell-powered vans in Europe, will launch an electric Ram ProMaster commercial van in Mexico late this year as its first full EV in North America. Ford launched its electric E-Transit van last year. GM began production of the BrightDrop Zevo 600 in December, with the smaller Zevo 400 expected later this year.
Although electrification and other new technologies like data telematics and software represent a shakeup and present the potential for opportunity to capture market share, commercial customers tend to be fiercely brand-loyal. Additionally, Stellantis would need more production capacity to support leadership volumes in North America.
“Toppling Ford would be a big feat for anybody, especially No. 3,” said Sam Fiorani, vice president of global vehicle forecasting for AutoForecast Solutions LLC, about Stellantis' ambitions. “There's a 2-to-1 advantage on the Transit to the ProMaster in the U.S. The F-series is also 2-to-1 over the Ram. That's a huge hurdle to jump.”
The automaker declined an interview request to discuss how it plans to achieve its LCV goals, though The Detroit News spoke last week with Chief Software Officer Yves Bonnefont on the role software will play in that. Last year when announcing the automaker's Dare Forward 2030 strategy, CEO Carlos Tavares said there will be 26 commercial launches globally by 2030, when Stellantis will have doubled LCV revenues with 40% all-electric sales. The presentation suggested Stellantis would hold a No. 1 “position” for commercial vehicles in North America by 2024.
Rental companies, governments and businesses make up fleet sales. They include upfitters like Winnebago Industries Inc., from whom Robyn Eller, 53, of Washington, Maryland, recently bought a new Travato, a camper van built in a high-roof Ram ProMaster. It's made her camping experience better by not having to hook up a trailer, she said.
“I liked the styling of it better than the Ford Transit or the (Mercedes-Benz) Sprinter,” Eller said of the $134,000 purchase. “It's comfortable to drive. It's pretty good on gas. I feel like I'm escaping the dayto-day stresses.”
Stellantis' U.S. fleet sales rose 67% year-over-year in the first quarter of 2023 with Ram posting a record for fleet sales for the first three months of the year. That was achieved despite a stop-sale for part of the quarter on heavy-duty trucks because of a fire-risk recall.
Automakers often resort to the fleet channel when they have an abundance of inventory, and Stellantis has more than 100 days of supply, said Michelle Krebs, executive analyst for auto information resource Cox Automotive Inc. It's an area that had been pushed aside in favor of retail sales amid the global microchip shortage, but people are traveling again, so rental companies are purchasing to make up for what they unloaded when business slowed from the COVID-19 pandemic.