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  3. Stellantis Invests $6 Billion in South America

Stellantis Invests $6 Billion in South America

10 Mar 2024
  • Is the Internal Combustion Engine Resilient in the Face of Evolving Industry Trends?

The automotive landscape is evolving rapidly, with an increasing focus on electric vehicles and alternative fuels. However, Stellantis, the automotive conglomerate that owns 14 brands, has made a bold statement by investing a staggering $6 billion in South America. This substantial investment underscores their commitment to traditional internal combustion engines (ICEs) and the development of flex-fuel technology, bridging the gap between gasoline and ethanol.

The Largest Automotive Investment in South America

The Largest Automotive Investment in South America

The automotive landscape is evolving rapidly, with an increasing focus on electric vehicles and alternative fuels. However, Stellantis, the automotive conglomerate that owns 14 brands, has made a bold statement by investing a staggering $6 billion in South America. This substantial investment underscores their commitment to traditional internal combustion engines (ICEs) and the development of flex-fuel technology, bridging the gap between gasoline and ethanol.

Stellantis is set to make history with the largest-ever investment in South America's automotive sector. The $6 billion injection will not only support the launch of over 40 new cars but also drive the development of innovative flex-fuel engines. This strategic move challenges the prevailing narrative of the imminent demise of traditional piston-powered vehicles.

Pioneering the Future of Automotive Power

Pioneering the Future of Automotive Power

At the heart of Stellantis' investment is the development of flex-fuel engines designed to run on both gasoline and ethanol. This technology represents a versatile approach to internal combustion engines, offering consumers the flexibility to choose between two commonly available fuels. This move aligns with the unique energy landscape of South America, where ethanol is readily accessible.

Stellantis is not merely sticking to conventional engines; they are also venturing into hybrid territory. The investment includes plans for vehicles with hybrid-flex and plug-in hybrid-flex setups, combining the efficiency of combustion engines with the benefits of battery power. This forward-thinking approach aims to enhance fuel efficiency and reduce environmental impact.

While the focus remains on traditional engines, Stellantis is not neglecting the global shift toward electrification. The conglomerate plans to introduce at least one fully electric car in the region. This commitment to diversification aligns with the evolving preferences of consumers and the broader automotive industry.

The $6 billion investment is slated to be deployed between 2025 and 2030, indicating a long-term commitment to the South American market. Importantly, the electrified flex-fuel engines are being engineered to seamlessly integrate into Stellantis' existing production lines in the region. This strategic decision aims to maintain cost efficiency and facilitate a smooth transition to new technologies.

With a commanding market share of 31.4 percent in Brazil and 23.5 percent across South America, Stellantis holds a dominant position in the region. The conglomerate's success extends to Argentina and Chile, where it leads in vehicle sales. In 2023, Stellantis sold over 878,000 vehicles in South America and emerged as the leader in the commercial vehicle segment with a 28.6 percent share.

Fiat, a brand under the Stellantis umbrella, has been a standout performer in South America. Despite challenges in Europe and North America, Fiat has consistently been the best-selling brand in the region for three consecutive years. This success highlights the brand's strong presence and popularity among Latin American consumers.

Stellantis is not alone in its commitment to combustion engines, as Toyota has also expressed a long-term dedication to ICEs by initiating the development of a new family of internal combustion engines. While emissions regulations in South America may not be as stringent as in Europe, the region continues to play a pivotal role in the global automotive landscape.

Stellantis' monumental $6 billion investment in South America sends a clear message – the internal combustion engine is far from obsolete. By embracing flex-fuel technology and hybrid solutions, Stellantis aims to cater to the diverse preferences of consumers while maintaining its stronghold in a region where traditional engines still reign supreme. As the automotive industry undergoes transformative changes, Stellantis positions itself as a trailblazer, defying predictions of the imminent demise of the internal combustion engine.

Wael Nakhle

BY Wael Nakhle

Wael is an automotive content writer specializes in creating written content for Motor 283. Producing a wide range of content, including blog posts, articles, product descriptions, reviews, and technical guides related to cars, trucks, motorcycles, and other vehicles, with an unprecedented passion for cars, and motorcycles.

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