Stellantis must face Tesla and China after its brilliant start to the stock market

File photo. The Stellantis logo at the entrance of the company’s factory in Hordain, France, July 7, 2021. REUTERS/Pascal Rossignol/

Por Giulio Piovaccari

MILAN, Jan 18 (Reuters) – If playing catch-up with Tesla is what is meant in the car industry, Stellantis, the company formed from the merger of Fiat Chrysler and Peugeot, is off to a good start: its shares have far outperformed its US rival in its inaugural year.

But this is only the first round.

Fixing its business in China and overcapacity in Europe are just two areas where analysts are expecting to see progress for Stellantis when Chairman Carlos Tavares unveils its detailed business plan on March 1.

After all, even though its shares are up more than 60% since its debut on January 18, 2021 – compared to Tesla’s 27% rise – Stellantis’ market value of 59,000 million euros (67,000 million dollars), it is still only 6% of that of its American rival.

A strong first year bodes well, though, as analysts at Jefferies say Tavares has shown vision and ambition with a “sustained stream of strategic initiatives.”

Since forging the world’s fourth-largest automaker by production, Tavares has mapped out a €30 billion electrification strategy, and has formed alliances with Amazon and iPhone assembler Foxconn to accelerate the development of software and semiconductors for cars. future connected vehicles.

It has also drawn up plans for five battery plants and reached agreements with unions to further streamline its European operations, avoiding potential labor disputes and raising the company’s operating profit margin to around 10%.

All this despite facing a semiconductor and supply chain crisis that cost automakers around the world millions of vehicles in lost production last year and is not expected to abate quickly.

But many say bolder action is needed.

As the group enters its second year, another long-term challenge is to revive its fortunes in China, the world’s biggest car market, where Fiat Chrysler and PSA, which owns Peugeot, had almost negligible market shares.

(1 dollar = 0.8775 euros)

(Additional reporting by Danilo Masoni in Milan, Brenda Goh in Shanghai, and Gilles Guillaume in Paris; editing by Mark Potter and Carmel Crimmins; translated by José Muñoz at the Gdańsk newsroom)

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