How Stellantis Aims to Turn Its Overseas Business Around to Drive Its Stock Higher

Most of us enjoy a good comeback story, and that's exactly what Stellantis (NYSE: STLA) hopes to achieve by the end of this decade. The struggling carmaker is putting its money where its mouth is with a $70 billion turnaround strategy that focuses not just on North America, but Europe as well, through a multipronged approach to affordable pricing as the price of new vehicles continues to rise.

Stellantis is committed to driving 70% of its investment through four core brands: Jeep, Ram, Peugeot, and Fiat. If the automaker executes its strategy well, investors should be well rewarded with market-beating returns through the rest of this decade. Lost in the shuffle, though, is a key resurgence in Europe. Let's dive in.

What's the plan?

It appears that Jeep will be instrumental in reversing Stellantis' fortunes in Europe. Investors know SUVs are big business in the U.S. market, but many don't realize that small SUVs and crossovers are Europe's second-largest segment, and compact SUVs and crossovers remain the largest segment.

The turnaround could be considered low-hanging fruit for the automaker, as about five years ago, strict European emissions standards reduced its product lineup to only two SUVs. Jeep stopped importing its Grand Cherokee and Gladiator pickup back in 2024; imports of the Wrangler ended last year because those gasoline-powered vehicles would have bumped its corporate average CO2 emissions too high in the near term.

The game plan is roughly this: Stellantis will import the Jeep Recon electric midsize SUV in 2027, after it launches in North America this year. That will be followed by another Jeep import developed with Chinese partner, Dongfeng, in 2028. Two more small Jeep SUVs will then be produced in Europe on the STLA One platform between 2028 and 2030, which aims to cut production costs by 20% compared to current platforms.

Jeep's smaller SUVs should do well in Europe. Image source: Stellantis.

What it all means

While North America is likely to remain Stellantis' growth engine, especially when it comes to profitability driven by full-size trucks and larger SUVs, Jeep looks to be a crucial part of the game plan with smaller SUVs and crossovers in Europe. It's a solid first step to turning around its overseas business, and it gives Jeep a chance to thrive as one of Stellantis' core brands, especially while receiving more investment, as the brand deserves.

It's an intriguing time for the automaker that has watched its stock price decline nearly 70% over the past three years alone. As Stellantis works through its turnaround, while building a core identity through more investments in fewer brands, it gives investors willing to take some risk the opportunity to scoop up shares before a potential rebound through the end of the decade.

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool recommends Stellantis. The Motley Fool has a disclosure policy.