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# Why Stellantis Aims to Overtake Ford and Become the World’s Biggest Seller of Pick-ups and Vans
## Introduction
In the highly competitive automotive industry, there is a constant race to be the top player in the market. Stellantis, the company born from the merger of Fiat Chrysler and PSA in 2021, has set its sights on overtaking Ford and becoming the world’s largest seller of pick-ups and vans. Through a strategic plan that includes the development of electric and hydrogen models, Stellantis is confident in its ability to surpass its global rival. This article delves into the reasons behind Stellantis’ ambitious goal and explores the factors that could contribute to its success.
## The Growth Potential of Commercial Vehicles
### Higher Margins and Strong Growth Areas
While dominating the market for pick-ups and vans may seem like a matter of bragging rights, there are several compelling reasons for automakers to focus on these vehicles. Pick-ups and vans offer higher profit margins compared to cars, making them an attractive segment for companies looking to maximize their revenues. Additionally, these vehicles are primarily used for delivery and work purposes, which aligns with the growing demand in areas experiencing strong economic growth.
### Boom in Van Market
Jean-Philippe Learnato, head of commercial vehicles at Stellantis, believes that the van market, especially delivery vans, will experience a significant boom in the coming years. This optimism is driven by the increasing need for efficient and sustainable logistics solutions as e-commerce continues to thrive. As more and more businesses rely on delivery services, the demand for vans is expected to skyrocket.
### Africa and Medium-Sized Businesses as Growth Catalysts
Stellantis sees Africa and medium-sized businesses as key drivers for its ambition to become the top seller of pick-ups and vans. The company recognizes the untapped potential of the African market and aims to capitalize on the continent’s rising economic opportunities. Additionally, targeting medium-sized businesses allows Stellantis to cater to a specific segment that has unique commercial vehicle needs.
## Electric and Hydrogen Models as Game Changers
### Sustainable Future with Electric and Hydrogen Power
Stellantis understands the importance of sustainability and the shift towards cleaner transportation. To align with these global trends, the company is heavily investing in the development of electric and hydrogen-powered models. By offering a range of eco-friendly options, Stellantis aims to attract environmentally conscious consumers and position itself as a leader in sustainable mobility.
### Electric Ram 1500: The Battle in North America
One of the pivotal moves in Stellantis’ plan is the launch of an electric Ram 1500 pickup truck. Set to be sold in late next year, this vehicle is expected to be at the forefront of the battle for market dominance in North America. With four battery-powered Ram models scheduled for release within the next two years, Stellantis aims to leverage the popularity of the Ram brand and establish itself as a formidable player in the electric pickup truck market.
### The Ram ProMaster Electric Delivery Van
Stellantis is also entering the electric delivery van segment with the Ram ProMaster. Scheduled for release later this year, this model has already been ordered by Amazon for its fleet. By catering to the needs of e-commerce giants and offering sustainable transportation solutions, Stellantis aims to secure a significant share of the growing electric delivery van market.
### Future Growth: All-Electric and Hydrogen-Powered Models
Stellantis has ambitious plans for the future, with the introduction of all-electric and hydrogen-powered models in the pipeline. By 2025, the company expects to launch two more electric Ram models, with the option of offering them as hydrogen-powered vehicles as well. This diverse product lineup allows Stellantis to cater to various customer preferences while staying at the forefront of technological advancements in the automotive industry.
## Stellantis’ Current Position and Road to the Top
### Commercial Vehicles as Significant Revenue Source
Commercial vehicles already play a crucial role in Stellantis’ financial performance. They account for a third of the company’s revenues and about half of its profits. In 2021, Stellantis’ commercial vehicle unit sold 1.6 million vehicles, coming within 400,000 units of Ford’s sales in the same segment. While Stellantis has a strong presence in Europe and South America, it currently trails behind Ford and General Motors in North America and the Middle East and Africa regions.
### Surpassing Competitors: GM and Ford
To achieve its goal of becoming the world’s top seller of pick-ups and vans, Stellantis acknowledges that it needs to surpass its major competitors, specifically General Motors (GM) and Ford. In the United States, Stellantis aims to outperform GM in pickup sales by 2027. This requires a strategic approach and a deep understanding of the market dynamics to win over consumers and gain a competitive edge.
### Expanding Presence in Latin America
Stellantis has its sights set on Latin America as an important region for expansion. To compete with dominant players like the Ford Ranger and Toyota Hilux, Stellantis has launched the Ram Rampage, a smaller pickup truck manufactured in Brazil. The company recognizes the need to localize production in North America to comply with tax regulations and achieve market success in the region.
### Closing the Gap with Toyota in Africa
Africa presents an interesting opportunity for Stellantis as it aims to close the gap with Toyota, a brand that has long dominated the African market with its rugged models. By offering innovative and competitive products tailored to the specific needs of African consumers, Stellantis hopes to challenge Toyota’s leading position and establish itself as a strong contender in the region.
## The Road to Success: Sustainability and Connected Services
### Transitioning to Sustainable Solutions
Stellantis is committed to maintaining the profitability of its vans even as the industry transitions to electric or hydrogen-powered vehicles. Stellantis CEO Carlos Tavares, known for his pragmatic approach, emphasizes the importance of not jeopardizing the business model during this transition phase. By carefully managing costs, adopting efficient production processes, and optimizing supply chains, Stellantis aims to navigate the shift towards sustainable transportation successfully.
### Connected Services for Added Value
In addition to its focus on sustainable models, Stellantis recognizes the growing importance of connected services in today’s digital age. The company aims to generate €5 billion a year in revenue by 2030 from offering connected services such as digital maintenance alerts. By leveraging the power of data and connectivity, Stellantis aims to enhance the overall user experience and provide added value to its customers.
## Additional Piece: The Future of Commercial Vehicles
As technology advances and consumer preferences evolve, the future of commercial vehicles holds immense potential and exciting possibilities. Here are some unique insights and perspectives on the topic, showcasing the industry’s direction and the transformative changes expected in the coming years:
1. Autonomous Delivery Vehicles: The Rise of Last-Mile Solutions
– With the rise of e-commerce and the increasing demand for quick and efficient deliveries, autonomous delivery vehicles are becoming a focal point for innovation. Companies are exploring the use of self-driving vans and drones to revolutionize the last-mile delivery process, reducing costs and improving efficiency.
2. Electric Van-Sharing Platforms: Sustainable Urban Mobility Solutions
– In urban areas, van-sharing platforms powered by electric vehicles (EVs) are emerging as sustainable alternatives to traditional delivery models. These platforms allow businesses and individuals to access electric vans when needed, reducing congestion and emissions in densely populated areas.
3. Hybrid Powertrains: Balancing Efficiency and Range
– Hybrid powertrains, combining electric and internal combustion engine technologies, can provide a balance between efficiency and range. Commercial vehicle manufacturers are investing in hybrid solutions to address the challenges of long-haul transport while still achieving significant fuel savings and emissions reduction.
4. Data-Driven Fleet Management: Optimizing Operations
– As connectivity becomes more prevalent in commercial vehicles, fleet managers can leverage data and analytics to optimize operations. Real-time tracking, predictive maintenance, and intelligent routing systems enable companies to improve vehicle utilization, reduce downtime, and enhance overall fleet performance.
5. Hydrogen-Powered Commercial Vehicles: Unlocking Long-Range Potential
– While electric vehicles dominate the conversation surrounding sustainable transportation, hydrogen-powered commercial vehicles offer an interesting alternative for long-range applications. Hydrogen fuel cell technology provides fast refueling times and extended driving ranges, making it a promising solution for heavy-duty and long-haul transportation.
In conclusion, Stellantis’ ambitious goal to overtake Ford and become the world’s biggest seller of pick-ups and vans is driven by several factors. The company recognizes the growth potential of commercial vehicles, the increasing demand for sustainable transportation, and the importance of connected services. Through the development of electric and hydrogen models, targeting growth markets, and leveraging its strong product portfolio, Stellantis aims to position itself as a frontrunner in the industry. As the future of commercial vehicles unfolds, exciting innovations and transformative changes lie ahead, paving the way for a sustainable and efficient transportation ecosystem.
Summary:
Stellantis, the company born from the merger of Fiat Chrysler and PSA, aims to overtake Ford as the world’s largest seller of pick-ups and vans. The company believes that a range of electric and hydrogen models, combined with growth in Africa and among medium-sized businesses, will allow it to achieve this goal. Stellantis plans to double revenues from vans and pick-ups by 2030 and aims for 40% of its commercial vehicles sold worldwide in 2030 to be electric or hydrogen-powered. The company already accounts for a third of its revenues and about half of its profits from commercial vehicles. Additionally, Stellantis is investing in connected services and expects to generate €5 billion a year in revenue by 2030. The company is focused on sustainable solutions and aims to navigate the transition to electric and hydrogen vehicles while maintaining profitability. As the future of commercial vehicles unfolds, autonomous delivery vehicles, electric van-sharing platforms, hybrid powertrains, data-driven fleet management, and hydrogen-powered vehicles are among the key trends and innovations shaping the industry.
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Unlock the Publisher’s Digest for free
Roula Khalaf, editor of the FT, selects her favorite stories in this weekly newsletter.
Stellantis aims to overtake Ford as the world’s biggest seller of pick-ups and vans within four years, confident that a range of electric and hydrogen models will allow it to overtake its global rival.
The owner of the Ram and Peugeot brands believes growth in Africa and among medium-sized businesses will help it take top spot in commercial vehicles, as part of a plan unveiled on Wednesday to double revenues from vans and pick-ups by 2030.
Dominating delivery and work vehicles involves more than just bragging rights for automakers, which face rising costs and competition from China; Pick-ups and vans have higher margins than cars and are located in areas where strong growth is expected.
“I am convinced that this van market, and in particular delivery vans, will boom in the coming years,” said Jean-Philippe Learnato, head of commercial vehicles at Stellantis.
Commercial vehicles already account for a third of revenues Stellantis, born from the merger of Fiat Chrysler and PSA in 2021, and about half of its profits. Its commercial vehicle unit sold 1.6 million vehicles last year, within 400,000 of Ford, Learned said. The US group dominates the market with its range of F-150 pick-ups and Transit vans.
impresa said he expects the overall profitability of Stellantis’ vans to remain stable, even if the models switch to electric or hydrogen power. “We cannot crush the business model in this transition,” he told the Financial Times.
An electric Ram 1500 pickup truck sold late next year, one of four battery-powered Ram models expected over the next two years, will be at the “hub of the battle in North America,” he said.
Stellantis will begin sales of the Ram ProMaster electric delivery van later this year, a model that has already been ordered by Amazon for its fleet. The third and fourth electric Ram models will be pickups and all-electric, or offered as hydrogen-powered, arriving in 2025.
Stellantis is the largest seller of vans in Europe and South America, but is second in the Middle East and Africa, and trails both Ford and General Motors in North America.
The company would “probably” have to surpass GM in U.S. pickup sales to meet its 2027 goal, Learned said.
The Ram brand has launched the Ram Rampage, a smaller pickup truck made in Brazil, for sale in Latin America. The model is key to expanding the company’s presence in a segment dominated by the Ford Ranger and Toyota Hilux. It will be necessary to locate production in North America in order to sell on the market for tax reasons.
Imperato said any pickup sold in Europe will have to be fully electric.
Stellantis is also “closing the gap” with Toyota in Africa, he added, a market the Japanese brand has dominated for decades with its rugged models.
Stellantis aims for 40% of its commercial vehicles sold worldwide in 2030 to be electric or hydrogen-powered, it said on Wednesday. While around 43% of European van sales are currently electric – the highest percentage of any European manufacturer – levels are much lower in the Americas.
The group also expects to generate €5 billion a year in revenue by 2030 from offering connected services such as digital maintenance alerts.
Its van and pick-up division achieved revenues of around 47 billion euros in 2021, the benchmark for its targets. Expected revenues from services of 5 billion euros are included in the revenue target for 2030.
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