Carlos TavaresCEO of Stellantis, has stated that his company has been “arrogant” as it has not been able to react quickly to the convergence of several problems in the United States in recent months, including production problems and rising inventories. “When I say we have been arrogant, I mean me. Nobody else. I mean the fact that I should have acted immediately.” tavares he said during a meeting with investors at the automaker’s North American headquarters in Auburn Hills.
Carlos Tavares admits that he underestimated some issues in the United States
tavares He said he should have formed a working group to address the problems, which included production problems at a couple of American plants that “They’re not working like they should.” The CEO made these comments as Stellantis’ sales in the United States have declined, its dealerships have struggled to get cars off the lots, its plant operations have at times been difficult and it has had to deal with layoffs, and the The automaker’s market share has declined. slipped into the US
But Tavares and other Stellantis executives remained optimistic about their ability to right the ship in this market thanks to a combination of cost reductions and a host of new vehicles, including several electric models. Despite what Tavares called “headwinds” For profitability in both the U.S. and Europe, the automaker confirmed its overall financial guidance for 2024, including a double-digit adjusted operating profit of 10 or 11% and the distribution of approximately $8.3 billion (7.7 billion million euros) in dividends and buybacks this year.
natalia knight, chief financial officer at Stellantis, said the influx of new models this year will account for an increasing share of the company’s revenue, up to 15-20% in the second half of the year, compared to 10% in the first half. half. Meanwhile, he said the company expects prices for raw materials used in its vehicles to drop. He further added that the company expects more job cuts on the horizon to save about $200 million enterprise-wide in the second half of the year. “There will be questions about whether we are at the end in terms of cost reduction and whether we are at the limits or not. It is the same as asking: do we have limits to our imagination?, tavares saying.
In addition to staff reduction, stellantis Executives also discussed their efforts to save money by moving more engineering departments to so-called “best-cost” countries, such as Morocco, India and Brazil. Stellantis is also increasingly seeking parts from suppliers in those lower-cost manufacturing countries. Additionally, the Group reduced the company’s total number of vehicle platforms to just four, allowing it to simplify design and production across different makes and models and reduce costs.
The cost reduction is done in the name of the transition to electric vehicles, tavares he said, and the need to remain competitive with Chinese automakers looking to grow in new markets around the world where Stellantis seeks to maintain its market share. The automaker has set a goal for 2030 to sell 100% electric cars in Europe and 50% in the US.
stellantis CEO has repeatedly criticized rising tariffs, such as the Biden administration’s decision to increase them to 100% for Chinese cars and the European Union’s decision to increase them to 38%. The rates are “fix the lack of competitiveness” which he says will be counterproductive for some European and American automakers in the long term.
Stellantis is partnering with one of China’s leading electric vehicle manufacturers, jump motor, to sell its low-cost vehicles in many markets. Stellantis owns 51% of the new Leapmotor International, which will oversee production and distribution of the cars outside of China. “We will take advantage of its cost competitiveness” tavares saying. “We will take advantage of their technological knowledge, that is, electric propulsion systems and everything related to connectivity. And we will take advantage of this for our benefit through the export company.”
