STELLANTIS READY TO BE ‘DISRUPTIVE’
CEO says combined FCA-PSA will bring tech, efficiencies to the table
Stellantis CEO Carlos Tavares on Wednesday said the new car company formed from the merger of Fiat Chrysler Automobiles and PSA Peugeot would be a “disruptive” force in the industry, and that both sides would provide technologies to achieve the promised $6 billion in cost savings each year.
The Italian-American carmaker and the French mass-market automotive company completed their merger on Jan. 16, creating Stellantis, the world’s fourth-largest carmaker, despite a pandemic year that saw profits plunge.
“Stellantis is not born from a crisis,” Tavares told a conference call after fourth-quarter earnings were released. “This is not only about implementing synergies, it will also be a disruptive plan. We do not accept to be cornered as a legacy carmaker.” cited the recent investment in the Archer aviation company to develop vertical flying devices for urban mobility as an example of how Stellantis intended to be a new disruptive force.
“We believe that this strategic investment is going to be highly convergent with the technology we need for the automobile world,” he said, citing energy management, lightweight batteries and quick-charging technologies.
“We are not going to let ourselves be cornered as dinosaurs, that is clear,” Tavares said.
Tavares also indicated that both FCA and PSA would conTavares tribute technologies that would help the company get rid of duplications and save money.
He cited bigger engines from FCA, and smaller ones from Fiat, and said that PSA has been adept at achieving efficiencies through sharing components and platforms, while FCA has faster processes.
“So if I combine both, I should go fast and I should be very efficient at the end of the day,” the CEO said.
Offering its first financial guidance, Stellantis announced it was targeting an adjusted income margin of between 5.5 percent and 7 percent in its first year of operation as a new company.
Tavares said one “strong caveat” to the guidance is that they cannot anticipate if there will be lockdowns or restrictions on business due to the pandemic.
While strong North American performance is expected to help Stellantis meet the goal, Tavares said “three big gorillas” were providing headwinds: rising costs of raw materials, potential production losses due to a shortage of semiconductors and increased costs for electrification.