Carlos Tavares, CEO of the Stellantis group, has questioned the production of cars in China.
For a long time, the Celestial Empire was considered a profitable place for the Western auto industry. Any manufacturer that managed to gain a foothold there made huge profits – that’s what it looked like quite recently.
However, running a profitable business in the world’s largest car market is no longer as easy as it was a few years ago. All manufacturers notice this, but only Stellantis boss Carlos Tavares has the courage to speak openly about it.
In Stellantis it is no longer profitable to make cars in China, he says. This is due to the asset optimization strategy that the automotive group is currently pursuing. This may mean that the car manufacturer will reduce the number of factories.
“If we continue with this strategy, we will no longer need factories in China,” Tavares said in Paris.
For example, the Jeep Stellantis brand has announced that it is withdrawing from its Chinese joint venture with the state-owned Guangzhou Automobile Group (GAC) and will close the factory, which has been in operation for 12 years. Similar steps could be taken by other group manufacturers such as Peugeot and Citroën.
The reasons
Tavares said the reason for Jeep’s decision was that the Chinese government was increasingly willing to interfere in business decisions. In addition, the local GAC partner “did not deliver what was promised”. The global political situation also played a role.
“We don’t want to fall victim to cross-sanctions, as has recently happened to other companies in other parts of the world,” Tavares said.
Tensions between China and the Western world are rising and this will certainly affect business, he said.
Perhaps it makes sense to move production to India. If you assemble electric vehicles for Europe there, you will benefit from the country’s low labor costs. His group is considering this option, but the issue has not yet been definitively resolved.
Contest
Tavares also sees local competition as a threat: the products of Geely, BYD, GAC and Co. have overtaken the Europeans in terms of quality and technology, and sometimes even outperform them in electric drives, battery technology and software.
Source: auto-motor-und-sport.de
A picture: Depositphotos
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