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Here's the latest this morning. Auto Earning's reflecting some big challenges for the industry, with ford A Stellantis delivering disappointing results, Stillantis opting to bring back old models and wearing price cards after a massive drop in sales during the first half of the year. Joining us now to discuss the Stalantis CEO Carlos Stavaras. Carlos, great to catch up with you, sir, difficult mourning for the stock. We're down about eight percent, you know that. I want to talk about some of
the brands. I'm not sure how many people recognize or realize how big this company is. So just give me a couple of seconds to go through this. At the premium end, you've got the luxury brand like Maserati. Then you've got Alfa, Romeo Lancier. You've got Jeep, which of course is well known here in the United States, Christ the Dodge ramp over. In Europe, Citron, Fiat opal Pergo, a buff which, of course Abbath is part of the Fiat business. This goes on and on and on, and
I'm trying to work out this morning. Carlos Wather you're committed to all of that that lineup those brands, or whether some of them could become and spun off.
Oh there is.
First of all, you are right to say that the automakers are under pressure. The auto industry is in a turmoil, and as you are looking at the results, everybody is going in the same direction. And for the time being, as much as I am aware of, we are the only guy in town with the double digit ay margin. But you are right, we are under pressure. And to your question about the brands, there is no taboo. There is absolutely no taboo. The brands are intangible assets that
we respect. We believe that they are here to be leveraged. We could celebrate this year the one hundred and twenty fifth anniversary of Fiat and OPO, which demonstrates that the brands are stronger than the legal entities, stronger than the political regimes, and they can cross wars, survive and get better. So we do respect the brands. We respect the fun basis of the brands, but there is no taboo. If they are not able to monetize the value that they represent,
then decisions will come. For the time being, all of our brands with no exception, are profitable. It is not by chance that we are a ten percent a Y margin a car company the only want to be double.
Digit so far.
It is just because our brands are great, our products are very appealing, and I will just use the example of our Ram pickup trucks where we are again number one in the gd Power Quality survey, which means that our customers appreciate what our creative people are bringing to the market. Now, it is true that the market is in the turmoil. It is true that the transition that we are going through is immensely challenging. And this is a bump. There will be other bumps. This will last
for a few years. This is not a short term turmoil, and the most resilient, the most focused, the most customer focused, will survive, of course. And that also means, because that's what I'm hearing, that cost reduction is not becoming a tubway anymore. As you know, we have been working hard on cost reduction for many years. We have not been so popular, but now everybody recognizes that the customers want affordability,
The customers want a safe, clean and afford mobility. So that's my comments to your great question.
Thank you, there's one question about cutting the cost of the vehicle. There's another question about cutting costs internally to offset some of the increased expenses. Shipmen's North America fell eighteen percent in the last quarter, and I'm just wondering whether some deeper cost cutting, to John's point, is required to sort of bring that up to speed at a time where the EV transition isn't spending as quickly as people had planned.
For exactly and what you are saying, you say is not happening as quickly as the people that planned for. I would like, with all the respect to correct that it is not happening as quickly as the political leadership is expected.
What we are.
Seeing in the Western world right now is that the consumers are not supporting as much as the political leadership was expecting the EV rampop and the consumers they are very clear in what they expect from us. They expect safe, clean, and affordable mobility. And safe and clean they are affordable is the challenge. So they want basically to buy EV
cars at the price of internal combustion engine cars. They don't want to pay more for the EV technology, which I can totally understand, and I want to tell them that we are working super hard to achieve that, and we already have evidence that we are succeeding because we started to launch our first B segment EV cars from twenty thousand euros a little bit more than twenty thousand dollars, and we will bring to the US market in a couple of years a Jeep model below twenty five thousand dollars.
So yes, we hear what they say, and we are working super hard to deliver that. And indeed, the political leadership through the regulations, thought that the consumers were able and willing to pay a higher price for evs, and they are telling us the consumers that they don't agree with that. And we are in the middle. We are the fuse between the consumers and the regulators. We are trying to fix it, and of course it's difficult.
It's difficult.
In January, you said you were going to hold off on some of your investments in the United States because you wanted to see how the election played out. But are you basically saying now it doesn't matter who gets elected because the consumers are rejecting the government push towards the EV models.
Well, that's not exactly what I am saying, it's a little bit more complicated than that. What I'm saying is that we have received loud and clear the message of affordability that the consumer is asking us to deliver on evs. The sooner we get there, the faster we are going to ramp up. And the investments in the EV technology are already done. What needs to be done now is the investments in the capacity for the volumes. So the investments in the capacity will be staged in function of
the adoption by the consumers. And the adoption by the consumers is going to be function of our ability to bring affordable vehicles to the market, which we are right now doing. And I think it's going to have a few bumps on the road. That's nothing specific or nothing surprising. It is going to be a bumpy road, and we will adapt the capacity investments to the adoption rate of the consumers, which is going to be the consequence of affordability.
That's where we are, and we are bringing a lot of proof points that we are achieving that starting with European market right now, but it will come very soon with your US, Carlos.
How difficult is it to compete right now with Chinese auto manufacturers who really have a leg up in providing affordable electric vehicles and are able to export some of those to Europe. Right now, there are.
Gates in the US.
Are those gates positive or negative for you at a time when you're a global car business?
Well that's a great question.
As we are a global car maker, and it was pointed out that we had a fourteen plus one brand. The plus one is a Chinese brand, Lick Motor. So yes, we have fifteen brands and we are a global car maker. As a racing team we are. We need to recognize that being global means that we will not be protected everywhere. For instance, we are not protected in Latin America, we are not protected in Africa Middle East. So as a racing team we are we need to confront ourselves with
the harshest competition. Right now, the harshest competition is China and they have a thirty percent cost competitive edge against US X workspaces and we are working hard to recover those thirty percent cost competitive anticap that we have. And it's good for a company like ours to be competing with the harshest competition. That keeps us awake, that keeps us alive, and we need to run fast and even
faster to compete. Then when we come to protected markets, we have to realize that there are a lot of side effects and collateral damages to protected markets and that protection that may be nice in the short term may have enormous disadvantages in the mid and long term. And that's why we do not advocate custom duties. We have to fight against the best. We have to make ourselves better in quality, in appeal, in costs. This is the
way we can survive. And we used to say at seventies the only thing that protects us is performance and we deeply believe in that.
If that's the case, does that make it harder to keep a production based in places like Italy?
It makes us harder in the Western world indeed. But in the Western world we have more knowledge, more experience. We should use our education, our scientific education, our capability to work collectively to find padding breakers to compete.
It is possible.
The twenty three thousand euro mid trim EC three c tuan is made in Europe, of course, in the lowest cost countries of Europe.
But it's made in Europe. It's made inside of europe Act.
You know. The reason I ask is because there are some Chinese producers looking for manufacturing base in Italy. You of course have some production basis there. I wonder if you'd be interested in selling them.
Well, it's a public information that all the European governments are dating the Chinese carmakers to come to assemble their vehicles in their countries. So all the European countries Italy, France, Germany, Spain, they are all dating the Chinese.
Fine, So that's a fact.
So if you were to ask me, which is possibly your question, would I would be willing to sell one of my.
Plans to the Chinese?
I would ask you back a question, what is the intention of the European Union if we are encouraged to sell our plans to the Chinese? What will be the sense and the purpose of inviting the automakers of Europe, which represent fourteen million jobs, to end over their plans to the Chinese? Does that make sense for the European citizen? Of course it doesn't make any sense, which, of course we know. So of course all businesses business will see what the future will bring.
But we are here for the fight.
We are here to demonstrate that we have more appealing brands, more exciting cars at the right level of affordability, with the right performance and the right safety. So we are going to fight. This is a competition. We love competition and everything we do for Europe because the market is much more open US market. Yeah, in terms of competitive is of our technology will benefit our American brands because Stanenttis is a global carmaker and the technology is available
for the fifteen brands of the company. Anything we do to compete with the Chinese in Europe or in the rest of the world will benefit, of course our US brands to bring affordability and performance as soon as we can to this market.
Colors, you've been super generous with your time. I just want to return to my original question though, the way you pose your response to that, the conversation that I would have with a policy maker for the good of the European economy and for the good of European labor, it's a very different one to the CEO of an order manufacturer. You, of course accountable to the shareholder and the stock is down by nine percent as you know today,
this's a difficult day for Stilantis. So when I ask you a question like, would you sell a production base in Italy to the Chinese. I'm not asking you that as a public official who needs to worry about the size of the European labor market. I'm asking you that as a seat yo, as the llansis. Is that a good financial decision for you to make?
It depends if I am making profit out of that facility or not.
When you're under capacity there on you.
I will make sure that we keep the capacity above eighty percent each visiion rate. That's the threshold. As long as you are above eighty percent, you can do a good job, and.
Your confident you will be for the next twelve months and beyond.
This is one of the things we have been discussing with the Italian government. They keep on asking us to have a one million car production, and I keep on answering that I need one million customers. The point is not about the production. The point is about the customers.
Now, it is.
Quite clear that if you have one million customers out there and you have to break down the one million customers among a certain number of car makers, If you increase the number of carmakers competing for the same one million customers. It is easy to understand that there will be less cars to be produced, and that is going to open the road to a new context. And in the new context we'll see what other decisions we need
to make. But at the end of the day, it all boils down to something we know very well in the US.
Make the customer happy. Period.
It starts there good quality, good appeal, good affordability, and then you will capture the share of the market that you deserve. And if you don't compete with the harshest competition, then forget it. On the long run, you are going to disappear. There is no other way than to compete with the harshest competition at any point in.
Time, Carlos, I can tell you this. I'd be very happy if there was a mass AROUNDI on my drive. Okay, we can leave it there, callus. Thank you, appreciate your time. I can talk all day with you. Appreciate it. Calstavirusats the scientist see