Category: PRODUCTS

 

By Avik Chattopadhyay

 

Earlier this week, it was announced that the merged entity of PSA Group and Fiat Chrysler Automobiles will be called ‘Stellantis’.

 

Quite an interesting move, given that the merged mega corporation owns some power brands like Peugeot, Fiat, Alfa Romeo, Citroen, Lancia, DS, Dodge, Jeep and Chrysler.

 

The official press release says that the name is rooted in the Latin word ‘stello’ meaning ‘to brighten with stars’. “The name’s Latin origins pay tribute to the rich history of its founding companies while the evocation of astronomy captures the true spirit of optimism, energy and renewal driving this industry-changing merger,” says the joint statement.

 

Why would the merged entity not imaginatively call itself ‘PCFC Automobiles’ or ‘Tri-Nation Mobility’? Why would it not take advantage of its unique French, Italian and American roots and call itself accordingly? We have had Daimler Chrysler, Arcelor Mittal, LVMH and Exxon Mobil, to name just four from many mega-corporations formed out of mergers/ acquisitions.

 

Creating a new brandname and identity while forming a mega corporation is a strategic call to be taken by the merging entities. I can think of six clear reasons in favour of this action. The specific action could be due to any of the following or a combination of them:

 

Protect strong individual brands – when the merging entities have very powerful brands that need to maintain their individual positions in the market, it is prudent to go for an umbrella branding that transcends strong product / solution brands. Inditex is a great example owning brands like Zara, Pull & Bear and Massimo Dutti.

 

Partnership of equals – when each merging entity is on the same footing, then it is best to go for a new name as that does not give out any subliminal messages, internally and to the world on who exactly has the upper hand. It was Exxon Mobil and not the other way round. And “we are following the alphabetical order” is not a good excuse as we also had Daimler Chrysler clearly showing who was the boss. Arcelor Mittal was a clever strategic call as Arcelor was the more ‘credible’ name to ride on for Mittal to establish his empire.

 

Merge provenance and cultures – Stellantis will see three cultures coming together to create a unique ecosystem requiring a fresh name to the new organisation. Entities which till yesterday overtly flaunted their provenance will now have to consciously move above and beyond this, without damaging the provenance of each product brand. Citroen will be quirky French while Dodge will be American muscle. Stellantis may be a combination of existing cultures or build a completely new one, born out of the new business purpose.

 

Need to expand and acquire – mega organisation brands are created when conglomerates are planned through acquisitions and expansions. General Motors is the classic example, being formed in 1908 as a holding company for William Durant’s latest acquisitions of Buick and Oldsmobile, to be rapidly followed by Cadillac, Elmore, Pontiac and Reliance. The group name sounded grand and officious enough to take on Ford. Another example is United Spirits which was founded in 2006 announcing the merger of McDowell, Herbertsons, Shaw Wallace and few other companies. While these two examples are of mega corporations in the same industry space, a multi-industry example is United Technologies [now Raytheon Technologies] that once spread across various industries through brands like Otis, Sikorsky, Carrier and Chubb Security amongst others.

 

Deliver a greater purpose – mega-corporations go into rebranding or creating a fresh brand when there is a significant shift or a new definition of the greater purpose. A good example to me is the creation of Alphabet in 2015 when Google realised its greater purpose lay in improving lives through empowerment, maintaining transparency and autonomy of various businesses in the conglomerate. Google’s recent announcement of investing $10 billion in India in the specific areas of health, education and agriculture is a manifestation of this greater purpose.

 

Give a positive spin – or the inverse of it which is to remove any negative opinion and associations with one entity when the merger is in process. A good example here is when Philip Morris rebranded themselves as Altria when acquiring Kraft Foods, now no longer part of the mega-corporation. The conscious attempt to move into foods and non-tobacco businesses led to the creation of a new name with no association with the core business.

 

Personally, I love the decision of the PSA Group and Fiat Chrysler Automobiles to call the merged new mega corporation Stellantis. It is a bold decision in the right direction. There is no obvious association with the automobile and neither any deliberate resting on the countries and cultures they come from. It sure sounds from the ‘western’ world with some Latin / Greek connection. Other than that, it is fresh and intriguing enough for people to ask them what it really means. That gives the brand the opportunity to narrate their story and share the new greater purpose. Cheers to that!