 "Stellantis CEO Carlos Tavares")
The tension between China and the West is going to be a "very good opportunity" for India economically, said Carlos Tavares, the global chief executive officer of Stellantis, the world's fifth largest automaker. The company plans to export Citroen (C3), the electric version of its compact car, from India to Europe and South East Asia.
The global economy is slowing down but India is expected to stay ahead with 6-7 per cent gross domestic product (GDP) growth in 2023, he said. The automaker’s comments about India come at a time when its joint venture in China with the Guangzhou Automobile Group (GAC) is in the process of filing for bankruptcy. Stellantis planned to increase its stake in the joint venture from 50 per cent to 75 per cent, but surprisingly in July it decided to end the partnership. The company reportedly cited "political influence" in business as a reason for its decision.
“What is going on in China is a very good opportunity for India. We see the fragmentation of the world going on. We see growing tension between China and the Western world. That is going to have a consequence. The power that is best placed to leverage this opportunity is obviously India,” Tavares told journalists.
“From the parts sourcing perspective and from a technology perspective, India is certainly the super power that can leverage this opportunity. We feel great to be in India, we feel a lot of common values, about frugality, sense of hard work and team spirit,” he said.
The company said in a statement the electric version of the Citroen—planned for the market by January 2023—will be rolled out from its facility in Thiruvallur, Tamil Nadu. The petrol version was launched in India in July this year, and the EV model is expected to be targeting the middle class. The company said it plans to use the Thiruvallur plant for exports to Europe and South East Asia.
Tavares said 2021 and 2022 were good for the automobile industry, but it may face a slowdown in 2023. “We see that the global economy is going to slow down in 2023. That's also what all the competent administrations are predicting. They're also saying that India will be somewhere between 6 per cent and 7 per cent GDP growth. So, if there was to be a concern, globally, ahead of the curve will be India.”
Tavares said his company will be insulated from the recession. "Europe is under recession, the US is going into recession, and India is not at risk. For Stellantis, our breakeven point is below 40 per cent of our revenues. If something externally happens, the net revenue can go down by 60 per cent and we can still be in the black.”
