The head of major European automaker Stellantis puts out fires whether he faces east or west, but now he at least seems willing to accept when he may have made a mistake.
Carlos Tavares says his arrogance is to blame for the automaker’s failure to address three converging issues in its U.S. market.
The group behind Fiat, Chrysler and Jeep has suffered falling sales and stagnant inventories in the United States, reducing its market share.
Tavares said Stellantis took too long to sell inventory, had production problems and “lacked enough sophistication in the way it came to market.” There was arrogance in not recognizing these combined factors quickly enough, Tavares said.
“When I say we were arrogant, I mean me and no one else. I mean the fact that I should have acted immediately, realizing that the convergence of these three problems was there and that we had to create a working group to address them,” Tavares said at the Stellantis investor day.
“If you have a marketing strategy that is not optimal, when your inventory grows and your plants start to have problems, you think that you can solve each of the problems separately, but when these three things happen at the same time, it is more difficult. ”She added.
Stellantis sales in the United States fell 14% in the first quarter of the year, while global sales continued to decline.
The automaker saw inventories of its Jeep and Ram brands rise earlier in the year, Cox Automotive reported.
Tavares said the group’s production problems in the United States occurred at two unidentified factories. However, he said it won’t take much science to solve them: “It’s something we’ve done countless times, all over the world.”
The group remains profitable and has implemented a rigorous cost reduction policy, reducing its workforce by almost 50,000 since 2019.
Tariff battle in Europe
As Tavares works to revamp Stellantis’ operations in the United States, he also took the time to emphasize his opposition to tariffs after the European Union hit Chinese automakers with tariffs of up to 38.1%.
While European automakers are threatened by cheap Chinese electric vehicles, they have reason to be wary of tariffs. Beijing’s retaliation would likely hamper automakers’ ability to sell their cars in the Chinese market, while raising the price of crucial inputs for their own electric cars.
Automakers have also started forming strategic partnerships with Chinese manufacturers to take advantage of market synergies. Stellantis bought a 21% stake in Chinese brand Leapmotor earlier this year to help develop an affordable electric vehicle.
Tavares has previously lamented the idea that tariffs are a race to the bottom. He doubled down on that sentiment at Stellantis’ investor day, saying he wouldn’t rely on rates to remain competitive.
“We are going to fight to be as competitive as we should be in product performance, in range, in affordability. “We are going to compete because we are a global company.”
This story originally appeared on Fortune.com
