Carlos Tavares Details Stellantis Strategy For India

Murali Gopalan
24 Nov 2022
09:50 AM
3 Min Read

The CEO makes clear that chasing volumes is not priority, says he is pleased with the Tata Motors manufacturing alliance at Ranjangaon and explains why it is important to have a level playing field with Chinese EV brands in Europe


Carlos Tavares, CEO of Stellantis, reiterated at a Chennai roundtable on Wednesday evening that the company was not chasing volumes in India but “doing the right things the right way”. There has been a “good ramp-up in quality” for the Citroen brand where it is “properly manufactured” with dealers pushing the envelope on customer service. 

“I am happy with the (Tiruvallur) plant, product and service. We have been preparing this for more than six years and are at 95% localisation. The goal is to make the customer happy more than chase volumes,” he continued. Globally, Stellantis’ financials are “stellar” and it would rather take one thing at a time in markets like India.

Plans are also underway to export aggressively from the country even while keeping in sync with the electric vehicle (EV) foray. “We will launch the EV version of the C3 by the beginning of next year,” he added.   

EV Price Tag 

Whilst on the subject, he pointed out that the price tag of EVs remained a problem across the world and it was of little help if these were sold “only to wealthy people” as this would not “help the planet” in terms of cleaner vehicular emissions. “Clean energy and affordability are the key for EVs along with charging infrastructure,” said Tavares.

On the manufacturing partnership with Tata Motors at Ranjangaon near Pune, he told Mobility Outlookthat it was working “very well” and there was really no need to change the script. “In our very chaotic automotive industry, there is a saying…if it is not broken don’t try to fix it,” he added. From his point of view, the partnership is working well — “So far, so good and delivering what we expected from it.”

The two companies had entered into a deep alliance way back in 2006 which involved joint manufacturing at Ranjangaon as well as teaming up for retail. This was the time before Stellantis when Fiat was a standalone entity in dire need of a lifeline in India which came from Tata Motors.

The retail model was discontinued in 2012 but the manufacturing agreement continues where the Jeep and Tata Nexon are produced at Ranjangaon. Over the years, since the partnership came into being, Fiat acquired Chrysler during the Lehman crisis in 2008-09 paving the way for Fiat Chrysler Automobiles (FCA) which, more recently, merged with Groupe PSA of France to create Stellantis.

The company has its vehicle manufacturing operations in Ranjangaon and Tiruvallur near Chennai (for PSA’s Citroen brand) which was the erstwhile CK Birla car plant for assembling Mitsubishi models. Jeep has now taken over from the well known Fiat brand as the face of FCA in India and, along with Citroen from PSA, will power the Stellantis story in this part of the world. 

China Market

To another question from Mobility Outlook on the growing spectre of Chinese electric car brands in Europe, Tavares said it was quite clear that China “has been very smart” in managing the regulations of their markets. 

“They have created a space for leadership but what I can tell you is that we are ready for the fight and we are not going to step back in terms of mastering the technology on EVs,” added the Stellantis CEO. The company has also been working with some “very efficient” battery suppliers in China who are also very competitive. 

The risk, however, is that they would come to Europe under “very specific conditions” that “I am not enjoying when I go to their Chinese markets”. The key, according to Tavares, was that if Europe was to be kept open to Chinese auto brands, “I would like to see them enjoy the European market in the same competitive conditions as I do when we go to the Chinese market. Nothing more, nothing less”. 

In the process, this would be a good level playing field for everyone concerned and the underlying message therefore was that Europe would have to impose the same duty levies on Chinese auto brands as what is applicable to cars imported into China (from Europe).

“In terms of technology, we are quite confident and are going for the fight,” said Tavares. The problem, however, could arise if Chinese automakers choose to subsidise their offerings and take a beating on profits as part of an aggressive approach to gaining market share in Europe and other parts of the world. This has been a nagging concern globally especially in this new EV tug-of-war where the stakes are especially high for China which has taken a lead in this segment. 

“What is obvious is that we don’t know under which conditions of profitability they will go to Europe,” said Tavares. For the time being, the models seem to be priced higher and their positioning is that their technology is better and, therefore, there is no need to be aggressive on pricing. This remains a moot point, however, for the Stellantis chief. “I don't think that is right…we love competition,” he reiterated.

Geo-political Situation 

According to Tavares, the growing tensions between China and the US as well as Europe could have serious consequences for business. The silver lining, however, is that this could translate into a good opportunity for India even while the “fragmentation of the world” was bad for mankind in terms of more tension. 

“The power that is best placed to leverage this opportunity is India in terms of technology and skills. We feel great in India and share common values on frugality etc,” he added. China, of course, has been raising India’s hackles along the border and this in turn has led to a retaliation by way of keeping companies like Great Wall Motors and Changan Automobiles out of the investment arena. The two other key  players, MG Motor (owned by SAIC) and BYD already have their operations running but could face challenges ahead when it comes to fresh investments. 

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