Middle East

Stellantis plans to disrupt the Middle East automotive sector

In January of this year, a huge event happened in the automobile industry, but its scale and scale are rarely seen. Italian-American Fiat Chrysler Automobiles merged with PSA Group in France to establish Stellantis, the world’s fourth-largest car maker. Stellantis was founded on the promise of a € 5 billion annual synergy for investors in companies listed on the exchanges of Paris, Milan and New York. This entity has 14 brands of formidable weapons such as Jeep, Maserati, Ram, Alfa Romeo and Fiat.

Leading the regional business is Dubai-based Markus Leithe, who was appointed Group Managing Director of Stellantis in the Middle East in February this year. “This is not an acquisition. This is an equal merger. Therefore, FCA did not acquire PSA. We are considered a more global brand, not as a French, American or Italian brand. We are particularly proud of it, “says Leithe, a company that deliberately went beyond its three post-merger home countries and chose to be based in the neutral Amsterdam of the Netherlands. Its new headquarters. He directly oversees the GCC and Levant markets, as well as the Iraqi market, and Pakistan may also be added to his watch. And although his role was only a few months, apart from managing the administrative reality of carrying out a merger, he also had to pay attention to his finances. In the third quarter of 2021, Stellantis reported net sales of € 32.6 billion worldwide, down 14% compared to the third quarter of 2020. In the Middle East and Africa markets, third-quarter net sales fell 10% to € 1.045 billion. Stellantis says it has cut quarterly production by 30%, or about 600,000 units, due to a serious semiconductor crisis.

The shortage of semiconductors affected all major car players in the world, but Litee found a silver lining in it. “With this semiconductor crisis, we are focusing on improving profitable vehicles and trims in our vehicle portfolio. Within an organization that is trying to distribute vehicles based on the margins you can get. You’re competing more. You might call it optimism, but you try to make the best profit you can. Also, work closely with your dealer to reduce inventory. And help maintain performance. Dealers are competing with each other for supply from us and also make it very clear. [that] I can’t supply so many cars, [they] We need to make sure we pursue profitable areas.

“also, [as for the] The channel mix focuses on retail rather than large fleet and broker businesses. “

The semiconductor crisis happened to coincide with the global supply chain crisis, but the latter had a limited impact on the delivery of actual vehicles and had a significant impact on the delivery of production parts within the factory. “We have put a lot of effort into our supply chain to reach our goals with a much shorter supply. [we] It also makes the dealer accountable.So it’s time to push the metal into the dealer, saying, “Now, sell them off now and try anything.” [you can],’Is completely gone. Now the opposite is true. “

One of the most pressing needs of today’s global automakers is to ensure that a clear, viable and robust electrification strategy is in place. Stellantis will spend a whopping € 30 billion over the next five years to electrify 98% of all new models by 2025.

By 2025, 55 electric vehicles will be sold in the United States and Europe. A number of EVs include the GMC Hummer EV (President Joe Biden recently grabbed one handle) and the all-electric Ram1500 full-size pickup. 2024, the same year we see electric dodge.

All Jeep models will offer a battery electric powertrain option by 2025, and Opel will fully electrify its fleet by 2024. Fiat has already begun phasing out internal combustion engine (ICE) vehicles and plans to become an EV-only brand by 2030.

By 2030, battery-powered electric vehicles and plug-in hybrid vehicles are expected to account for more than 40% of Stellantis’ sales in North America and 70% in Europe.

However, Stellantis not only focuses on product development, but also on the fundamental issue of affordability for electric vehicles. Therefore, we aim to make the total cost of owning an electric vehicle equal to that of a gasoline vehicle by 2026. Electric cars are, of course, always more expensive than ICE, so it’s actually a big question you have. The raw materials and technology required for electric vehicles will be more expensive than ICE, at least in the near future. And that’s especially difficult for the low-end car market, and even for immature markets with different purchasing powers in the population, “says Leite. “That’s what we’re trying to find a suitable solution.”

Some of these solutions include three electric drive modules that can be used to develop four EV platforms (STLA Small, STLA Medium, STLA Large, STLA Frame) and set up front, rear, or all-wheel drive. included. Combined, engineering prowess creates a flexible setup in Stellantis, enabling us to provide EV solutions for everything from runnouts to full-size SUVs.

Stellantis plans to have five battery factories that will provide cumulative 260GWh of battery capacity by 2030, half of which will be available by 2025. We also aim to install a solid state battery by 2026.

In October, Stellantis announced a joint venture with LG Energy Solution to establish a battery manufacturing facility with an annual production capacity of 40 gigawatts by the first quarter of 2024 in North America. Later, an agreement was announced with Samsung SDI to establish another battery factory in North America. The factory is expected to initially generate 23 gigawatts of time when it goes into operation in 2025.

But will Stellantis battery manufacturing sites also emerge in the Middle East? “I say it’s possible. We had the very first exchange of ideas about it, but nothing more. There is definitely interest from the government around it. “

Apart from pure battery technology, Stellantis will soon be exhibiting a hydrogen fuel cell van as well. Hydrogen is a subject that has already gained a lot of support in the region. “For example, we know that Saudi Arabia is currently very interested in hydrogen. I think there have been many announcements about the potential for hydrogen production in Saudi Arabia. Is it something you can be interested in? Absolutely, but we have nothing to announce at this time, “said Leite, a country that has stated its intention to become the world’s largest hydrogen exporter.

Lite and his team need to promote the infrastructure that supports the region’s electric vehicle ecosystem to see this category thrive. As he explains, the responsibility for building that infrastructure is not always the sole responsibility of the government. “I don’t think the government will necessarily develop the infrastructure, but the government looks for a partnership to develop it. It’s similar to what you have at a gas station-everyone there government sponsored. I don’t want a gas station to do. There are private entrepreneurs who take care of gas stations, but I think the same thing will happen with electrical infrastructure. And of course, there is home infrastructure. Someone has a car. If you are buying, they will get the infrastructure [to charge their vehicles at home].. We also work with many importers to help government agencies provide their infrastructure when it is in demand. “

As Stellantis celebrates its first anniversary, Leithe’s team focuses primarily on system integration to build a unified corporate culture and find common standard operating procedures for brands to choose their identity and cherry best. By supporting the merger, we are eliminating the management entanglement of the merger. Practice from each merged entity to create a single global SOP. “As for my personal vision for the Middle East, I think we need to achieve a fair market share. Given that we are already third in the region and fourth in the world, from a volume perspective as well. I think there is room for improvement to grow organically with a strong customer experience. I will look into profitability as it pays my bill today. And equally important is the employee Involvement and employee satisfaction. ”Stelantis is, in many respects, an experiment that blends culture, cross-border ideas and ideals, and business fundamentals, and is itself a complete 21st century globalization. Is an example of.

https://gulfbusiness.com/how-stellantis-plans-to-disrupt-the-auto-sector-in-the-middle-east/ Stellantis plans to disrupt the Middle East automotive sector

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