(ATF) Stellantis, the automotive powerhouse formed from France's PSA and the US-Italian Fiat Chrysler, has made the China market a top priority, its chief executive said on March 3.
Carlos Tavares said the company will roll out a strategy for China, where some Stellantis brands have struggled more than rivals.
He said he has "the will to stay in China and fix" the carmaker's business there. Tavares, who previously ran PSA, lifted margins by cutting costs, simplifying its line-up and delivering synergies through acquisitions, a strategy investors hope he can replicate at Stellantis.
Stellantis, is the world’s fourth-largest car manufacturer, owning the Abarth, Alfa-Romeo, Chrysler, Citroën, Dodge, DS, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram and Vauxhall marques. It has an annual output of more than 8.7 million vehicles, and an annual sales volume of 170 billion euros.
Group combined adjusted earnings before interest and tax amounted to €7.1 billion last year. At the end of 2020, combined liquidity stood at €57.4 billion and free cash flow at €3.3 billion. The group's New York-listed shares closed down 2.76% on Wednesday at $16.54.
Stellantis aims to deliver over €5 billion a year in savings, as well as bulking up to face industry challenges.
The company plans to have fully-electric or hybrid versions of all of its vehicles available in Europe by 2025, broadly in line with rivals such as Volkswagen and Renault-Nissan.
The group said 2021 results should be helped by three new high-margin Jeep vehicles in North America. The US market is the strongest part of Stellantis.
Tavares said the global semiconductor shortage is a significant challenge, describing the scarcity as a "big unknown" for 2021 revenue.
China's booming car market has benefited a number of companies that released results in the past two weeks, as revenues offset stagnant or declining markets in Europe and North America.
They include US petrochemical giant Dow Chemical, Canadian parts maker Magna and Swiss industrial group OC Oerlikon.
Dow launched its MobilityScience platform last year aimed at tapping the "light-weighting" push among car manufacturers seeking to increase the range and lower the energy use of electric vehicles (EVs).
"We have global sales today of 3 million EVs, which is only 4% of the global market, but that's growing extremely fast in Asia-Pacific, mainly in China," Jon Penrice, Dow's Asia Pacific president, said.
With reporting by Reuters