Automotive News Europe — 2024-06-05
Automotive Industry
European automakers are trimming costs to keep up with Chinese rivals.
Stellantis is willing to part with some of its suppliers and make vehicle components on its own to lower costs in the expensive shift to electrification.
“When suppliers are not racing at the same speed of our teams, our teams see a big benefit to in-source,” Tavares told reporters during a conference call from Melfi in southern Italy.
“You come to the conclusion that what you have outsourced, you can do it in-house.”
Automakers are pressuring suppliers to eke out more cost reductions amid slowing EV demand in Europe, where elevated borrowing costs, subdued economic growth and waning subsidies have weighed on sales.
At the same time, Chinese brands are expanding in the region with cheaper models.
BYD plans to offer its Seagull hatchback next year at a price below €20,000 ($21,730).
The company’s suppliers include Valeo, which Stellantis in 2023 lauded as keeping a lid on costs.
The Fiat and Jeep maker also procures from companies such as Continental, Magna International, Forvia and Aptiv, among others.
Stellantis and its partners also are adjusting investment levels for EV batteries to match vehicle demand, the CEO said.
Earlier Tuesday, 4 June 2024, Stellantis and Mercedes-Benz’s battery venture Automotive Cell Company said it had paused construction of a €2 bn plant in Germany to review plans and possibly switch to making lower-cost cells at the site.
On Melfi, which makes Jeep and Fiat models, Tavares said productivity and quality had improved.
While the company has been cutting jobs in the country, the CEO referred to recent talks with Italian unions as “constructive.”
Stellantis supports the Italian government’s target of producing 1 m vehicles locally, provided “there are 1 m buyers for them,” Tavares said.
Still, energy prices in Italy remain “totally uncompetitive,” he said, with Stellantis planning to enable Melfi to make its own electricity.