Jeep, Citroen brand owner eye profit in India amid crisis in China, Russia
Stellantis group, which owns brands like Jeep and Citroen, is focussing on India to grow at a time when its key markets like China and Russia are facing crisis of different kinds. While Covid-19 resurgence in China has its domestic car market, Russia's war with Ukraine has forced Stellantis to stop production. India may offer the olive branch the Group needs at this time. According to its chief Carlos Tavares, India is expected to be a profitable market and a bigger growth opportunity. "The challenges . .. are giving India a bigger opportunity, even bigger than in the past," he said.
In India, Jeep and Citroen brands operate and sell cars under Stellantis. While Jeep specialises in lifestyle, premium SUVs, Citroen has entered the market more recently. The French carmaker has only one product in India, the C5 Aircross SUV. It is expected to launch a smaller, more affordable C3 SUV later this year. Jeep too offers popular SUVs like Compass, and will launch a new three-row SUV called Meridian on May 19.
The two carmakers make up a fraction of the Group's global sales from the Indian auto market. Stellantis has less than one percent of India's car market. However, Tavares said he expects revenues to more than double by 2030 and operating profit margins to be in double-digits within the next couple of years. "Being profitable in India is possible if you do things the India way," Tavares said on Tuesday.
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According to Tavares, Stellantis needs to focus more on sourcing parts locally and vertically integrating supply chain to keep costs low. Engineering cars locally with features Indian consumers want and are willing to pay for will now hold priority in the carmaker's plans.
Stellantis will focus more on more affordable small cars in India with its smart car platform program. This is aimed to launch petrol cars measuring less than four metres in length. It will also launch electric versions of its small cars starting next year.
Stellantis manufactures its powertrains and gearboxes locally and sources more than 90% of the vehicle's contents in India. "We have been working for many years now on localisation, vertical integration in India, to enjoy the smart frugality of India," he said.
The carmaker also wants to source cells and batteries from India whenever the supply chain develops. Tavares said this would be the only way to build affordable EVs.
The world's fourth-largest carmaker is currently facing crisis in China, where it is reshuffling its strategy amid lagging sales and strong competition. It has also suspended its production in Russia due to the Ukraine war.