Stellantis $13 bn US investment plan gains support from investors

Stellantis' new $13 billion investment plan in the US marks a key step to countering tariffs imposed by President Donald Trump and to reviving the automakers' sales in its main market, investors and analysts said on Wednesday. 

The plan, announced late on Tuesday, would help buffer the group from US tariffs, an impact the French-Italian-American group had estimated in July at about $1.7 billion this year. 

"This move is relevant and part of a wider path started by Stellantis to be more and more aligned to the new business environment drawn by Trump with tariffs. It's paying off," Fabio Caldato, portfolio manager at AcomeA SGR told Reuters. 

Caldato recently increased his exposure to Stellantis. 

MORE FIRMS LIKELY TO MANUFACTURE IN US, ANALYST SAYS  In 2024, more than 40 per cent of the 1.2 million vehicles Stellantis sold in the US were imports mostly from Mexico and Canada, on which Washington imposed tariffs of 25 per cent. 

"I see it as an irreversible trend, to manufacture more where sales happens, a sort of forced de-globalisation process," said Massimo Baggiani, founder at London-based Niche Asset Management, expecting more such announcements. 

"More investments and sales in the US might also attract more American investors in the long term," said Baggiani, who has sold Stellantis shares in the past and was not investing back for now. 

"Stellantis shares remain cheap, but like the rest of the industry, they do not offer a significant discount compared to Ford or GM," he said. 

Stellantis shares rose as much as 4.3 per cent, and up to Tuesday's close were down 33.5 per cent year-to-date. 

INVESTMENT PLAN TIMING SHOWS 'GREATER TARIFF COMFORT'  The investment plan was necessary "to mitigate the impact of US tariffs and relaunch brands that have lost significant volume in recent years," Equita analyst Martino De Ambroggi noted, adding the reshuffled spending "should result in limited changes to total capital expenditure." 

"The timing of this announcement possibly signals greater tariff comfort/clarity on the part of Stellantis management," TD Cowen analysts Itay Michaeli, Justin Barrell and Selina Liu, wrote in a note.