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Stellantis sees India as a profitable car market in the face of challenges in China and Russia

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New Delhi — Stellantis Chief Carlos Tavares says India is a more profitable market than previously expected and a major growth opportunity as India faces challenges in countries such as China and Russia. I’m expecting it.

India, where Stellantis sells the Jeep and Citroën brands, accounts for part of the global sales of automakers, but Tavares said South Asian countries will more than double their sales by 2030. Therefore, we expect the operating margin to be in the next double digits. A few years.

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Western automakers have struggled to make money for many years in India, a market dominated by Suzuki and Hyundai in Asia for small, low-priced cars.

“If you do things the Indian way, you can make a profit in India,” Tavares said at a virtual media roundtable late Tuesday.

According to him, this would include locally procuring parts, vertically integrating the supply chain to keep costs low, and locally designing cars with the ability to be willing to pay for Indian consumers. Is included.

Founded in early 2021 by the merger of France’s PSA and Fiat Chrysler (FCA), Stellantis will increase profits and increase profit margins as it strengthens its efforts to deploy electric vehicles (EVs). I gave an overview of the new group strategy to keep.

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India will focus on headwinds in China, where the world’s fourth-largest automaker is restructuring its strategy amid sales delays and fierce competition, and Russia, which has stopped production due to the Ukraine War. It’s time to face.

“The challenge … is giving India even greater opportunities than before,” Tavares said.

At the heart of India’s plans, according to Tavares, is Stellantis’ domestically developed smart car platform program that will enable the launch of small petrol vehicles less than four meters long. Small cars are taxed at a lower tax rate and are more affordable.

He also said he plans to launch an electric version of the small car next year.

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Small cars are the Achilles heel for most of India’s global automakers, and trying to compete in that space is a race to the bottom for things like Ford and General Motors, eventually leading to a withdrawal. rice field.

However, Tavares is confident in Stellantis’ approach. We have strengthened our supply chain before building cars.

Stellantis manufactures powertrains and gearboxes locally and procures more than 90% of the vehicle’s contents in India. The company’s engine plant in southern India is a global benchmark for cost and quality, and two car plants that make Jeep SUVs and Citroen cars will do the same, Tavares said.

“We have been working on localization and vertical integration in India for many years to enjoy India’s smart frugality,” he said.

Stellantis has invested more than € 1 billion ($ 1.05 billion) in its business in India since 2015.

Automakers also want to procure cells and batteries from India as their supply chain evolves, adding that this is the only way to build an affordable EV.

Stellantis is less than 1% of India’s car market with 3 million cars a year, but Tavares said he is not chasing sales in India or around the world.

“We believe the world is changing, and in some cases it can be a penalty if it’s too big,” he said. ($ 1 = 0.9490 euros)

(Report by Aditi Shah, edited by Kim Coghill)

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Stellantis sees India as a profitable car market in the face of challenges in China and Russia

Source link Stellantis sees India as a profitable car market in the face of challenges in China and Russia

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