Stellantis Extends Furloughs at Italian Plant Amid Weak Demand and Tariffs

Stellantis has extended its furlough scheme at an Italian plant due to weak demand and tariffs. The company, which is one of the world's leading car manufacturers, operates through 4 sectors: passenger cars and light commercial vehicles, luxury vehicles, automotive equipment, and other services. Net sales are distributed geographically across various regions, with the majority coming from North America.

Stellantis has extended its furlough scheme at an Italian plant due to weak demand and tariffs. The company, one of the world's leading car manufacturers, operates through four sectors: passenger cars and light commercial vehicles, luxury vehicles, automotive equipment, and other services. Net sales are distributed geographically across various regions, with the majority coming from North America [1].

The furlough scheme, which was initially announced in 2024, aims to manage the impact of declining sales and rising production costs. The company has been facing significant challenges, including the economic downturn and trade tariffs that have increased production costs by approximately 150 million euros [3]. Stellantis is leveraging product innovation and employee energy to target market leadership, as evidenced by the unveiling of the redesigned Jeep Cherokee with a hybrid powertrain [3].

The 2026 Jeep Cherokee, featuring a 1.6-liter turbocharged four-cylinder hybrid powertrain, is the first hybrid vehicle introduced by Stellantis in the North American market. The new model is expected to reverse the brand's six-year sales decline and offers an electric-only range of over 500 miles. The vehicle also boasts a tech-savvy interior and a 30% increase in cargo capacity, priced from $36,995 [3].

Stellantis aims to strengthen its position in the hybrid SUV segment with this innovative powertrain, which combines efficiency, performance, and true off-road capability. The company's proprietary software continuously regulates power flow between the engine, battery, and electric motors, optimizing torque delivery as required [1].

Institutional investors have shown strong interest in Stellantis, with 59.48% of shares currently owned by institutional investors. Korea Investment CORP, one of the major institutional investors, reduced its stake in Stellantis by 3.5% during the first quarter, holding 1,260,463 shares valued at approximately $13.97 million [2]. Other institutional investors, such as Deutsche Bank AG and LPL Financial LLC, have also adjusted their positions, indicating ongoing interest in the company's stock.

Analysts have provided varying opinions on Stellantis' stock performance. Bank of America downgraded shares from a "buy" rating to a "neutral" rating, while Jefferies Financial Group upgraded shares from a "hold" rating to a "buy" rating [2]. The stock has a consensus rating of "Hold" and an average price target of $12.74.

Stellantis' extension of the furlough scheme underscores the company's efforts to navigate the current economic challenges and maintain its competitive edge in the automotive industry. The unveiling of the 2026 Jeep Cherokee and the introduction of the new hybrid powertrain are strategic moves aimed at revitalizing the brand's market position and driving future growth.

References:
[1] https://www.clubalfa.it/en/stellantis-1-6l-turbo-hybrid-delivers-power-and-efficiency-with-no-plug-24102
[2] https://www.marketbeat.com/instant-alerts/filing-korea-investment-corp-has-1397-million-stock-position-in-stellantis-nv-stla-2025-08-22/
[3] https://www.ainvest.com/news/stellantis-unveils-hybrid-jeep-cherokee-reverse-year-sales-decline-2508/