The Billionaire Behind Stellantis Wants Out But Can't Escape the Car Business

The Enduring Legacy of the Agnelli Family in the Automotive Industry

John Elkann, a billionaire from the influential Agnelli family that founded Fiat and now oversees Stellantis, continues to be deeply entangled in the automotive industry. Despite his aspirations to move away from traditional car manufacturing, the challenges faced by Stellantis highlight the difficulty of escaping the family's long-standing legacy.

A recent Bloomberg article delves into the struggles of Stellantis, which was formed through the 2021 merger of Fiat Chrysler and PSA Group. The company has experienced significant leadership changes, including the abrupt departure of Carlos Tavares last year. He was replaced by Antonio Filosa in May, following a chaotic executive search process. This instability underscores the complexities of managing such a large multinational corporation.

According to Carlo Alberto Carnevale Maffè, a professor of business strategy at Bocconi University, John Elkann is eager to transition from "pistons to pixels." However, the current state of the European car industry presents a major obstacle. The professor suggests that while Elkann may be betting on strategic mergers and acquisitions to redefine the family’s empire, the challenges facing the sector require more than just visionary thinking.

A Longstanding Vision for Asset Separation

The idea of separating assets has been a long-term goal for the Agnelli family. Years ago, when Sergio Marchionne was still leading Fiat Chrysler Automobiles (FCA), he had a clear plan to stabilize Fiat and use Chrysler as a distressed asset to strengthen the company. This strategy led to the successful Ferrari IPO in 2015, which was one of Marchionne’s greatest achievements. Other spinoffs and the eventual merger with another automaker were key parts of his vision.

During this time, John Elkann was using Exor, the family's multibillion-dollar investment firm, to diversify into non-automotive interests. However, Marchionne passed away unexpectedly in 2018 before he could complete his life's work. Since then, Elkann has taken on the challenge of managing the FCA and later Stellantis puzzle.

Leadership Challenges and the Impact of Tariffs

Elkann has been navigating the complex landscape of the automotive industry in the wake of two key figures: Marchionne and Tavares. Marchionne saw an opportunity during the financial crisis to acquire Chrysler and expand Fiat’s reach. Tavares, on the other hand, followed in the footsteps of Carlos Ghosn, aiming to manage a large and unruly company like Stellantis. However, Tavares did not succeed, and according to Bloomberg, his tenure left the company in a weakened state, particularly affecting the Jeep brand.

U.S. tariff policies have further complicated matters for Elkann. Major automakers like General Motors and Ford are projected to see billions less in profits in 2025 due to import duties. Japanese and German automakers are also adapting to a new trade environment after years of reduced barriers. While Elkann has not failed to improve the family’s financial position, they remain significantly wealthier than when the international venture began.

The Ongoing Struggle with Stellantis

Despite the challenges, Elkann remains tied to Stellantis, just as he was with FCA and Fiat before it. His involvement in the automotive sector has spanned over two decades, and he is approaching his fifties while still managing the family's legacy. On the positive side, the financial fluctuations of the past 20 years have reduced Exor’s exposure to Stellantis to less than 15% of its holdings.

On the negative side, the auto conglomerate is in trouble, and the traditional car business is expected to become even less profitable in the future. Managing a family business is notoriously difficult, and Elkann knows that exiting the industry is no easy task. The automotive sector remains a complex and challenging domain, and for the Agnelli family, it seems like an enduring part of their story.