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Europe's auto industry faces turmoil, but Fiat's parent company Stellantis appears immune – could its rivals' future be under threat?
The crisis affecting giants in the automotive sector in Europe has put companies against the wall, forcing them to review their strategies and, in many cases, to drastically cut their costs.
While Volkswagen sees its profit margins plummet and prepares for radical measures, another major automaker appears immune to the storm: Stellantis.
The group, which controls brands like Fiat, Peugeot and Citroën, has taken decisions that avoid, at least for now, the need for layoffs and factory closures.
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However, the path taken to avoid collapse has raised questions about the future of the sector as a whole.
During a ceremony to inaugurate new Stellantis offices in Italy, the group's CEO, Carlos Tavares, made strong statements that have put the industry on alert.
He noted that unpopular choices made by the company in the past saved Stellantis from a Volkswagen-like fate.
According to Tavares, the crisis affecting the German rival is not just a temporary issue, but the result of years of poorly planned decisions and a lack of strategic vision.
Stellantis wants to avoid chaos
According to Carlos Tavares, Stellantis took preventive measures to avoid chaos. “We were heavily criticized for our choices, but we knew that if we didn’t act, we would be in the same situation as our competitors,” said the CEO.
These decisions include strategic cuts in less profitable areas, adjustments in production, and the prioritization of models that adapt to new environmental regulations, which Tavares was keen to defend.
Global warming and new emissions rules in Europe have put extra pressure on automakers.
Tavares was against postponing the entry into force of these rules, arguing that Stellantis prepared in advance, unlike other companies that are now asking for more time to adjust.
“Our cars are ready, our factories are ready, and our teams are ready. Why delay something so necessary?” Tavares asked.
He was emphatic in stating that Stellantis' commitment to the environment is part of its long-term strategy, something that rivals such as Volkswagen have neglected.
Rival in crisis
Amidst the chaos that plagues the industry, the Volkswagen faces unprecedented difficulties. The German brand's sales have plummeted in both Europe and China, forcing the company to drastically revise its profit expectations for 2024.
To try to reverse this situation, an emergency plan was put into practice, with the aim of saving around 10 billion euros.
This plan includes the possible closure of factories in Germany, something never seen before in Volkswagen's history. Around 15 employees could be laid off as a result of labor agreements that were recently canceled.
Volkswagen's situation is emblematic of what could happen to other automakers that fail to adapt quickly to new market demands and environmental requirements.
Tavares, on the other hand, stated that the owner of Fiat and other brands such as Citroen and Jeep will not need to resort to such drastic measures., at least for now. “Our priority is to keep our employees and preserve our operations, but we are attentive to market changes,” said the executive.
While Stellantis appears to be navigating the turbulent waters affecting its competitors with ease, the future remains uncertain. “We don’t know what the future holds, but we are prepared for any eventuality,” concluded Tavares.
With climate change and new environmental regulations putting pressure on automakers, can Volkswagen and other giants adapt in time or will we see more factories closing and thousands of jobs lost?
