By Giulio Piovaccari
MILAN, May 19 (Reuters) - Stellantis' CEO Antonio Filosa will outline a new long-term strategy to investors on Thursday with a focus on reviving crucial U.S. sales, tightening the group's sprawling portfolio, and leveraging tie-ups with Chinese firms.
The presentation at the Fiat-to-Jeep owner's capital markets day, in Auburn Hills, Michigan, is a crunch point for Filosa who was brought in last year to turn around the carmaker's flagging fortunes after it lost ground in the U.S.
and Europe. Its shares hit an all-time low in March this year.
The world's No. 4 automaker by sales is expected to outline plans to focus funding on a smaller group of four core brands, Reuters reported, while looking to expand joint ventures with Chinese automakers to make use of capacity and trim costs.
"They just need their North American business to function. That will give immediate value to their stock," said Massimo Baggiani from London-based Stellantis investor Niche Asset Management, which has bought two tranches of shares since March.
Baggiani added that Stellantis needs to tackle overcapacity in Europe, overhaul its brand strategy and fend off growing competition from Chinese rivals in regions like South America and Africa where it remains profitable.
"The good thing is that Filosa seems to be aware and has ideas on how to address such challenges," he said. "We'll need to test him over a longer period."
STELLANTIS PRESENTATION TO CONTAIN 'A LOT OF CHINA'
Filosa will also likely focus on partnerships with Chinese automakers after Stellantis this month announced it will expand its joint venture in Europe with Leapmotor and a deal with Dongfeng to produce vehicles in China.
Filosa's pitch to investors will have "a lot of China in it," a source familiar with the matter told Reuters.
The group has excess production capacity across several countries and, like European rival Volkswagen, Filosa says Stellantis is open to sharing European factory space with other Chinese automakers beyond Leapmotor.
The group last week hinted that its manufacturing cooperation with Dongfeng could soon expand beyond China.
Investors are eager to know whether Filosa's plan can deliver a sustained sales recovery and lift profits, while addressing issues from brand complexity to industrial inefficiency and $26 billion charges for scaling back its EV ambitions.
Such deals could also help the Franco-Italian automaker improve its own EVs by acquiring electric know-how from Chinese rivals, who have competitive EV platforms and supply chains, major cost advantages and quicker car development time.
BRAND STRATEGY
Citi analysts said in a note that Filosa was trying to address gaps in the U.S. market - where its cars only chimed with half of all buyers - with the new Jeep Cherokee as well as compact and midsize pickup trucks.
Investors will also be looking for clarity on Stellantis' vision for its 14 brands, the industry's largest portfolio.
Focusing investments on Jeep, Ram, Peugeot and Fiat would be a shift from the group's traditionally more even allocation of resources and reflects the need to focus capital on higher-volume, higher-margin labels without scrapping brands entirely.
Remaining brands will stay, but with a more niche or regional scope.
"If you are too drastic in deciding to quit one or the other, then you are losing that customer base for somebody else," Filosa said last week.
"The real point is not to select one, two, three, or four brands," he added. "The real point is to combine efficient capital allocation with brand-specific strategies."
($1 = 0.8541 euros)
(Reporting by Giulio Piovaccari; Editing Nick Carey and Gus Trompiz)
