Stelantis chief Carlos Tavares expects India to be a profitable market and a bigger growth opportunity than the carmaker, as it faces challenges in countries such as China and Russia.
Stelantis chief Carlos Tavares expects India to be a profitable market and a bigger growth opportunity than the carmaker, as it faces challenges in countries such as China and Russia.
India, where Stelantis sells its Jeep and Citron brands, makes up a fraction of the carmaker’s global sales, but Tavares said he expects revenue in the South Asian country to more than double by 2030 and operating profit margins next year. Inside will be in double digits. couple of years.
Western carmakers have struggled to make money in India for years, with their small, low-cost cars in a market dominated by Asia’s Suzuki Motor and Hyundai Motor.
“It’s possible to be profitable in India if you act like India,” Tavares told a virtual media roundtable late Tuesday.
According to him, this includes sourcing parts locally to keep costs down and vertically integrating the supply chain, and locally engineering cars with features that Indian consumers want and are willing to pay for. . Stellantis, formed in early 2021 through the merger of France’s PSA with Fiat Chrysler (FCA) in March, outlined a new group strategy to increase revenue and keep profit margins high as it transitions to electric vehicles (EVs). Roll out efforts.
India’s focus has come at a time when the world’s fourth-largest carmaker is facing adversity in China, where it is shuffling its strategy between sales and strong competition, and in Russia, where it has sold Ukraine. Production has been suspended due to the war. “The challenges… are giving India a bigger opportunity than ever before,” Tavares said.
Tavares said that at the heart of its India plan is Stelantis’ smart car platform program which it has developed in the country to launch smaller, gasoline-powered cars less than four meters in length. Small cars are taxed at lower rates, making them more affordable.
He said that it will also launch electric versions of its small cars from next year.
Small cars have been an Achilles heel for most global automakers in India and efforts to compete in that space are running down the line for the likes of Ford and General Motors, making their final exit.
But Tavares is confident in Stelantis’ approach — before building cars, it has strengthened its supply chain.
Stelantis manufactures its powertrains and gearboxes locally and sources over 90% of the vehicle’s material in India. Tavares said its engine plant in southern India is a global benchmark on cost and quality and it plans to do the same at its two car plants, where it manufactures Jeep SUVs and Citroen cars.
“We have been working for many years on localization, vertical integration in India to enjoy the smart economy of India,” he added.
Stelantis has invested over one billion euros ($1.05 billion) in its Indian operations since 2015.
Tavares said the carmaker is looking to procure cells and batteries from India as and when the supply chain evolves.
Stelantis has less than 1% of India’s 3 million car market annually, but Tavares said it is not chasing volume in India or globally.
“We believe that the world is changing and in some cases being too big can be a punishment,” he said.
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