The head of major European automaker Stellantis is fighting fires whether he faces east or west, but now he at least seems willing to accept when he might have made a mistake.
Carlos Tavares says his arrogance is to blame for not addressing three converging problems the automaker encountered in its U.S. market.
The group behind Fiat, Chrysler and Jeep has faced declining sales and stagnant inventory in the United States, causing its market share to shrink.
Tavares said Stellantis took too long to sell inventory, had manufacturing problems and lacked “sophistication in how it went to market.” There was arrogance in not recognizing those combined factors quickly enough, Tavares said.
“When I say we were arrogant, I mean me and no one else. I mean the fact that we should have acted immediately, recognizing that the convergence of those 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, the moment your inventory grows and your plants start to have problems, you think that you can solve each of the problems in isolation, but if all three things happen at the same time “So it’s more difficult,” he added.
Stellantis’ U.S. sales declined 14% in the first quarter of the year, amid a broader decline in global revenue.
The automaker saw inventories of the Jeep and Ram brands rise earlier in the year, Cox Automotive reported.
Tavares said the group’s manufacturing problems in the United States occurred at two unidentified plants. However, he said it wouldn’t take “rocket science” to fix them: “It’s something we’ve done tons of times, all over the world.”
The group remains profitable and has adopted a rigorous cost-cutting regime that has seen its workforce reduced by almost 50,000 since 2019.
Tariff battle in Europe
As Tavares works to revamp Stellantis’ U.S. operations, he also took time to highlight his opposition to tariffs after the European Union hit Chinese automakers with import levies 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 prevent automakers from selling their cars in the Chinese market, while raising the price of crucial inputs for its own electric vehicles.
Automakers have also started forming strategic partnerships with Chinese manufacturers to take advantage of synergies in the market. 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 tariffs 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.”
