It is as simple as that. The brands considered premium by Stellantis sold in H1 2021 the same quantity of cars sold by Mercedes-Benz passenger cars in just 14 days. The huge sales volume gap between them is just an example of how far Stellantis is from reaching the levels that guarantee the survival of some of its brands.
Sales increased by 21%
The premium group posted a sales increase of 21% compared to the first half of 2020. With 79,300 units branded Alfa Romeo, DS and Lancia, the results were definitely better (as expected) than during the worst-of-the-pandemic/lockdown period, but still lower than the 112,700 units sold in H1 2019. This means that these three brands made up 2.2% of Stellantis combined sales through June this year.
Although the company announced big plans for these three brands, the reality today is quite complicated. Their lineup doesn’t sum up more than 10 products and nothing is expected to arrive before late 2022, when Alfa Romeo is due to introduce (or at least reveal) the new Tonale. Carlos Tavares gave a 10 years timeline to all of the brands of the group to prove their commercial feasibility.
Lancia grows faster
The paradox is that the brand that offers the most aged car, has the smallest lineup, and the least premium product, is the one growing faster. The data through June shows that Lancia posted a 44% growth vs H1 2020, while Alfa Romeo and DS increased their volumes by 13% and 10% respectively. These are good news for Lancia but bad news for the whole premium strategy.
The Ypsilon is an old hatchback that sells well in Italy mostly because of the attractive deals. As the brand has more than covered the research and development costs associated to the launch of this car, it can offer better prices to customers. However, the pricing strategy of the Ypsilon goes against the goal of repositioning Lancia as a real premium brand.
At the same time, the rest of premium products from Alfa Romeo and DS face tougher competition and the electrification challenge. Nevertheless, I still think that the premium strategy of Stellantis should only focus on Alfa Romeo and DS, as they have more potential than Lancia. It makes more sense to have 2 solid premium brands than 3 weak ones. Don’t you agree?
Alfa Romeo at the same levels of Lancia
Even if it offers two modern and handsome cars, and has presence in more than 50 countries around the world, the sales volume of Alfa Romeo can barely outperform that of Lancia. Actually, Lancia already outsells Alfa Romeo in Europe, as it has been the case since 2019. The same happens to DS, with presence in Europe and China and with a lineup composed of 3 models available in H1 2021 (one more to come in H2).
Of course, we must take into account that the Ypsilon is an affordable city-car for the masses in Italy, while the cheapest Alfa Romeo starts at €47,000 in Italy. In France, you can get a new DS 3 Crossback for €24,900. Obviously, the Ypsilon has a wider clients universe. However, there are other reasons in addition to the price.
- Some of the products of Alfa Romeo and DS play in segments whose sales are dropping.
- It will be always hard to compete against the 3 German premiums. Ask Jaguar or Infiniti.
- EVs are driving the few growth remaining in Europe. Only DS offers these powertrains (PHEV and BEV) in its lineup.