Stellantis Plans $388 Million Spare Parts Facility in Detroit

As legacy European automakers have been significantly hit by Trump's tariffs, Stellantis N.V. (NYSE:STLA) is finally attempting a bold move to potentially get ahead of its competition. The Netherlands-based company announced on Wednesday morning its plans to invest $388 million to build a spare parts plant in Detroit. The hub is expected to launch in 2027 in Van Buren Township, Michigan, and will support at least 488 union-represented jobs.

The announcement comes weeks after STLA stock posted a multi-year low around "Liberation Day", as the new tariffs with the US created another major risk for European OEMs, which have already been disrupted by Chinese car makers. STLA sold more than 1.3 million cars to the US in 2024, which represents 23% of its total sales base. The new fab on US soil is likely to increase the company's immunity to tariffs and support its existing manufacturing base of 18 facilities in the US. By producing more spare parts directly in the US, STLA will decrease the portion of its supply chain that could potentially be subject to tariffs.

After a challenging 2024 in which STLA stock lost more than half of its value amid intensifying competitive threats from Chinese brands, Stellantis N.V. (NYSE:STLA) is already outperforming the broad market since April, suggesting that management is taking the right strategic steps to protect its North American market. STLA was formed in 2021 through the merger of Fiat Chrysler Automobiles and France's PSA Group, and owns 14 iconic brands, including Jeep, Ram, Chrysler, Dodge, Fiat, Peugeot, and Maserati, among others.

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