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Stellantis ready to kill brands and fix U.S. problems, CEO Tavares says

  MILAN — Stellantis is taking steps to fix weak margins and high inventory at its U.S. operations and will not hesitate to axe underperforming brands in its sprawling portfolio, its chief executive Carlos Tavares said on Thursday. The warning for lossmaking brands is a turnaround for Tavares, who has maintained since Stellantis was created in 2021 from the merger of Italian-American automaker Fiat Chrysler and France's PSA that all of its 14 brands including Maserati, Fiat, Peugeot and Jeep have a future. "If they don't make money, we'll shut them down," Carlos Tavares told reporters after the world's No. 4 automaker delivered worse-than-expected first-half results, sending its shares down as much as 10%. "We cannot afford to have brands that do not make money." The automaker now also considers China's Leapmotor as its 15th brand, after it agreed to a broad cooperation with the group. Stellantis does not release figures for individual brands, except for Maserati which reported an 82 million euro adjusted operating loss in the first half. Some analysts say Maserati could possibly be a target for a sale by Stellantis, while other brands such as Lancia or DS might be at risk of being scrapped given their marginal contribution to the group's overall sales. Stellantis' Milan-listed shares were down as much as 12.5% on Thursday, hitting their lowest since August 2023. That brings the loss for the year so far to 22%, making them the worst performer among the major European automakers. Few automotive brands have been killed off since General Motors ditched the unprofitable Saturn and Pontiac during a U.S. government-led bankruptcy in the global financial crisis in 2008. Tavares is under pressure to revive flagging margins and sales and cut inventory in the United States as Stellantis bets on the launch of 20 new models this year which it hopes will boost profitability. Recent poor results from global carmakers have heightened worries about a weakening outlook for sales across major markets such as the U.S., whilst they also juggle an expensive transition to electric vehicles and growing competition from cheaper Chinese rivals. Japan's Nissan Motor saw first-quarter profit almost completely wiped out on Thursday and slashed its annual outlook, as deep discounting in the United States shredded its margins. Tavares said he would be working through the summer with his U.S. team on how to improve performance and cut inventory.

Ferrari borrows $2.6 billion to finance FCA spinoff

Ferrari announced Monday that it is borrowing about $2.6 billion to finance its spinoff from Fiat Chrysler Automobiles. Here's how it breaks down: Ferrari NV, the automaker's parent company based in the Netherlands, is taking out loans totaling 2.5 billion euros. That's equivalent to $2.64 billion at current exchange rates, and is divided between a term loan of $2.12 billion and a revolving credit facility of $529 million. The larger term loan "will be used to refinance indebtedness owing to Fiat Chrysler Automobiles," among other purposes. That ought to constitute the lion's share of the $2.38 billion which the Prancing Horse marque was, according to reports last year, slated to pay its current parent company in order to help FCA fund its ambitious growth plans. The separate line of credit is earmarked "to be used from time to time for general corporate and working capital purposes of the Ferrari group." Though Ferrari is not expected to take any other Fiat Chrysler properties with it, the "group" in this case would include its various financial services and distribution arms around the world that may have been separately incorporated. As noted in the statement below, the financial arrangement "represents a further step towards the separation of Ferrari from the FCA Group," following the separate stock issues from both companies as independent from each other. FERRARI N.V. SIGNS ˆ2.5 BILLION SYNDICATED CREDIT FACILITY Ferrari N.V. (NYSE: RACE) ("Ferrari") announced today that it has entered into a ˆ2.5 billion syndicated loan facility with a group of ten bookrunner banks. The facility comprises a bridge loan (the "Bridge Loan") and a term loan (the "Term Loan") of ˆ2 billion in aggregate and a revolving credit facility of ˆ500 million (the "RCF"). Proceeds of the Bridge Loan and Term Loan will be used to refinance indebtedness owing to Fiat Chrysler AutomobilesN.V. (NYSE: FCAU) ("FCA") and other indebtedness and for other general corporate purposes. Proceeds of the RCF may be used from time to time for general corporate and working capital purposes of the Ferrari group. The Bridge Loan has a 12 month maturity with an option for Ferrari to extend once for a six-month period. Ferrari intends to refinance the Bridge Loan prior to its maturity with longer term debt, including through capital markets or other financing transactions. The Term Loan, which comprises a majority of the total facility, and the RCF each have a maturity of five years.

2017 Chrysler Pacifica Hybrid scored 84 MPGe in government testing

The 2017 Chrysler Pacific, in non-hybrid form, was already at the top of the minivan heap in terms of EPA-rated fuel economy. Now the government agency has released its official test numbers for the Pacifica Hybrid, and they're looking pretty good. The non-hybrid Pacifica achieved 28 highway, 18 city, and 22 combined miles per gallon, which compared favorably to the 2016 Honda Odyssey's 28/19/22 and Nissan Quest's 27/20/23 ratings. You can read more about the regular Pacifica's scores right here. But none of these vans compare to the Pacifica Hybrid, which is incidentally the only hybrid in the class. FCA claims that the EPA's numbers are even better than the anticipated 80 MPGe, although we can't speak to whether that's an honest admission or a too-convenient claim. But there's no denying that the official rating – 84 MPGe – is impressive. If you aren't familiar with the MPGe rating, no worries. It's not as straightforward as conventional EPA MPG ratings, but a layperson can understand how it works. MPGe stands for miles per gallon equivalent, and measures fuel economy based on the energy content of a gallon of petroleum-based gasoline. For those who like formulas, the Automotive X Prize once defined MPGe as (miles driven) / [(total energy of all fuels consumed)/(energy of one gallon of gasoline)]). As for a conventional rating, the EPA only provides a combined city/highway number on the Monroney sticker, and an FCA spokesperson told us that the rating for the Pacifica Hybrid will be 32 MPG. This represents the hybrid working as normal, not in EV-only mode. It's also an improvement of almost 10 MPG over the combined ratings of the top three conventional minivans in the segment, including the non-hybrid Pacifica. Range is also fantastic. The EPA rated the total EV-only range as 33 miles, and the overall combined range at a staggering 566 miles. And that's from a fuel tank that's just 17 gallons (compared to the 19-gallon tank in the conventional Pacifica, which nets it a 418-mile EPA-rated range). FCA is going to extraordinary lengths to credit its eFlite transmission-generator unit, which can supply electric power to the front wheels if necessary. It's a piece of equipment that represents a substantial engineering investment, and apparently that's all paid off. Chrysler tells us that the Pacifica Hybrid will go on sale next month, and that dealers will get more volume in Q1. Related Video: This content is hosted by a third party.