NEW DELHI (Reuters) – Stellantis chief Carlos Tavares expects India to be a profitable market and a bigger growth opportunity than the carmaker previously expected as it faces challenges in countries such as China and Russia.
India, where Stellantis sells its Jeep and Citroen brands, makes up a fraction of the carmaker’s global sales but Tavares said he expects revenues in the South Asia nation to more than double by 2030 and operating profit margins to be in double-digits within the next couple of years.
Western carmakers have struggled to make money in India, a market dominated by Asia’s Suzuki Motor and Hyundai Motor with their small, low-cost cars. Last year, Ford Motor (NYSE:F) Co became the latest carmaker to stop selling cars in India.
“Being profitable in India is possible if you do things the India way. The reason why some of the Western carmakers failed is because they did not recognise that,” Tavares said at a virtual media roundtable late on Tuesday.
This, according to him, includes sourcing parts locally and vertically integrating the supply chain to keep costs low, and building cars with features Indian consumers want and are willing to pay for.
Stellantis, formed at the start of 2021 through the merger of France’s PSA with Fiat Chrysler (FCA), in March outlined a new group strategy, as it steps up efforts to roll out electric vehicles (EVs) while maintaining profitability.
The focus on India comes at a time when the world’s fourth-largest carmaker is facing headwinds in China, where it is reshuffling its strategy amid lagging sales, and in Russia, where it has suspended production due to the Ukraine war.
“The challenges … are giving India a bigger opportunity, even bigger than in the past,” Tavares said.