The boss of major European carmaker Stellantis is fighting fires whether he looks east or west, but he now at least appears ready to accept when he might have made a mistake.
Carlos Tavares says his arrogance is to blame for failing to address three converging issues the automaker ran into in its U.S. market.
The group behind Fiat, Chrysler, and Jeep has faced declining sales and stalled inventory in the U.S., which has caused its market share to shrink.
Tavares said Stellantis was too slow to sell down inventory, ran into manufacturing issues, and that it lacked “sophistication in the way to go to market.” There was an arrogance in failing to recognize those combined factors fast enough, Tavares said.
“When I am saying we were arrogant, I’m talking about myself, nobody else. I’m talking about the fact that I should have acted immediately, recognizing that the convergence of those three problems was there, and we had to set up a task force to address them,” Tavares said at Stellantis’ investor day.
“If you have a marketing strategy that is suboptimal, at the moment when your inventory grows and your plants start having problems, you think that you can fix each of the issues in isolation, but if the three things happen at the same time, it is more difficult,’’ he added.
Stellantis’ sales in the U.S. declined 14% in the first quarter of the year, amid a wider fall in global revenues.
The carmaker saw inventories for Jeep and Ram brands jump at the start of the year, Cox Automotive reported.
Tavares said the group’s manufacturing issues in the U.S. occurred at two unnamed plants. However, he said it wouldn’t take “rocket science” to fix them: “It is something we have done tons of times, everywhere in the world.’’
The group remains profitable and has undertaken a rigorous cost-cutting regime that has caused its headcount to fall by almost 50,000 since 2019.
Europe tariff battle
While Tavares works to renew Stellantis’s operations in the U.S., he also took the time to highlight his opposition to tariffs, after the European Union slapped Chinese carmakers with import levies of up to 38.1%.
While European automakers are threatened by cheap Chinese EVs, they have reason to be wary of tariffs. Retaliation from Beijing would likely impede automakers’ ability to sell their cars in the Chinese market, while also increasing the price of crucial inputs for their own EVs.
Carmakers have also begun 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 EV.
Tavares has previously lamented the idea of tariffs as a race to the bottom. He doubled down on that sentiment at Stellantis’ investor day, saying he wouldn’t rely on tariffs to stay competitive.
“We are going to fight to be as competitive as we should be in the performance of the products, in the range, in the affordability. We’re going to compete because we are a global company.”
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