In recent months, faced with an increasingly difficult China to do business there, Carlos Tavares, the CEO of car manufacturer Stellatis, has stepped on the accelerator in India, where the group has invested more than a billion euros since 2015. Two brands of the manufacturer have been launched: Jeep, in 2016, and Citroën, in 2021.
“India is a growing country and its population is 17.2% of the world population with a very favorable age pyramid. It is a young country, 64% of the population is under the age of 34”, welcomes the Franco-Portuguese leader. Interview.
The Point: India’s population has surpassed that of China recently. How is it a symbol?
Carlos Tavares: It is more than a symbol, because beyond the number, India is bestowed with the title of “largest democracy in the world”! This is important on a planet that tends to fragment in its economic and geopolitical relations. It is in this context that we believe it is very important to provide Indians with a mobility offer – clean, safe, affordable – to preserve the freedom of movement of this young generation of consumers.
Why accelerate in India today?
As part of our “Dare Forward 2030” strategic plan, we are complementing the two regions where we are historically strong, Europe and North America, with what we call our “third engine”. This new growth driver is made up of South America, Africa Middle East and India and Asia Pacific. In this last region, India represents a key development potential to achieve our ambitions. The country has one of the largest networks of higher education systems in the world, with an enrollment rate of over 90%. The forecast puts India in the top 4 global automotive markets by 2030, with 5 million cars. It’s a country where agility and frugality resonate with the Stellantis mindset. Our presence there is very large with the production of vehicles, mechanical components, via three factories (Ranjangaon, Hosur, Thiruvallur,) but also engineering and software hubs. The expertise of Indians in this field is recognized worldwide, which is why we have chosen to install one of our eight hubs there for the development of our software.
Is it mandatory to manufacture locally?
Our credo is “Developed and Made by Indians, for Indians First”. But we intend to make our Indian base a source of development for other countries in the Asia Pacific region. In 2022, we had a growth of more than 57% in volumes and we intend to continue this trend with a very dynamic supply policy. The Citroën C3 is a real asset with an Indian market made up of 72% of vehicles under 4 meters. In addition, our Jeep brand enjoys a very strong image with customers, on which we intend to capitalize to strengthen its presence.
Will India replace China, a market that has become more complicated?
The international geopolitical context is not the same for India and for China. This is one of the reasons why we have an “assets light” policy (few assets on site, editor’s note) in China to lower our level of economic exposure in a market where we are seeing the rapid gain in market share of domestic manufacturers compared to foreign manufacturers. India’s economic model is different, more open and allows us to better control our value chain and the potential of our investments. Since 2015, we have invested more than one billion euros in the country and we are fully in line with the Indian government’s approach to promoting the electric vehicle which covers the period 2022-2023 until 2026-2027. Thanks to our dynamic management of our business, Stellantis was profitable in India in 2022, as in 2021 in a market where customer requirements are at a very high level.
What are the specificities of the Indian market and the mistakes not to make?
Indian customers have high automotive expectations and are hungry for new things. The automobile is a form of expression of status for a generation that aspires to social and environmental progress. Moreover, it is a market strongly driven by technology. Consumers are fond of it and willing to spend on it. We were thus the first manufacturer to offer sales on the Internet. Our showrooms are phygital. It is necessary to be always on the move in India. This is why you need a high localization rate – more than 95% – and a footprint that goes from R
