Stellantis in India profitable with Jeep, Citroen still in red, Auto News, ET Auto

Stellantis credited the company’s gains in India to its lean investment strategy.

New Delhi: Stellantis, which operates through Jeep and Citroen brands in the country, is profitable as a group. But both the brands have not reached the profitability mark in the country yet, according to a senior official of the company.

“Both Jeep and Stellantis have been profitable in India and we will be profitable again this year. Not many OEMs operating in the country can say that,” said Roland Bouchara, MD and CEO of Stellantis in India, to ETAuto.

He confirmed that the Jeep brand was profitable in 2021, adding: “To be able to invest in new technology, profitability is important to the business.”

The parent company, which is also the world’s fifth-largest automaker, said that while Citroen is not independently profitable, it expects the brand to join the league soon.

“We can be happy with where we are, but we want to do better. The Indian market has the potential, and we should be able to increase sales in the region, says Bouchara.

However, the European carmaker has invested heavily in its C-Cube platform which was developed in India, by the Indians. It is also distributed for the Latin American markets.

Earlier, Carlos Tavares, Global CEO, Stellantis credited the company’s gains in India to its frugal investment strategy. “Our break-even point is 40% of net revenue,” he said.

In January 2021, Stellantis was formed through a merger of FCA (Fiat Chrysler Automobiles) and France’s PSA Group. Jeep took over from the Fiat brand in India and Citroen from Peugeot.

The company now operates from three manufacturing facilities – Ranjangaon near Pune, Hosur in Tamil Nadu and Thiruvallur on the outskirts of Chennai. It also has an ICT hub in Hyderabad, a software center in Bengaluru and two R&D centers in Pune and Chennai. Around 3,000 people have been employed in the country.

Unlike other foreign car manufacturers in India, Stellanti’s business model is based on joint venture (JV). It gets an advantage of manufacturing Jeep vehicles at Fiat, Tata Motors JV plant in Ranjangaon.

PSA Group, the French auto major that makes Peugeot and Citroen cars, re-entered India by signing an agreement with CK Birla Group. The former CK Birla car factory for assembly of Mitsubishi models is used for Citroen.

Stellanti’s transmission JV facility in Hosur saw the installation of some refurbished machinery moved from outside India. Moreover, the company has also started exporting its powertrain which is contributing to profit in India.

The automaker’s Citroen brand entered the domestic market with its C5 Aircross SUV in April 2021. The C3 compact car was introduced in the petrol version in July this year and it is now set to enter the EV space with the electric version in January 2023.

In FY22, the company sold 775 units of the C5 Aircross in the country. The brand currently has a market share of less than 1% in the Indian passenger car market. By the end of calendar year 2022, the target is to sell around 6000 units of C3 and 500 units of C5 Aircross in India.

However, Jeep started with its Compass model in India, which was launched in August 2017. The company now offers 4 products in its portfolio, Compass, Wrangler, Meridian, and the recently launched Grand Cherokee.

Domestic sales FY18 FY19 FY20 FY21 FY22
Jeep compass 19,358 16,079 8,453 6,536 11,949

“We have a long involvement in India. We should be one of the major key players in the (SUV) segment which is expected to grow in the coming years,” Tavares said.

The Amsterdam-based automotive business has a portfolio of 14 car brands globally, including Jeep, Peugeot, Opel and Maserati.

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The world’s fourth largest automotive group believes it is profitable in the long term to take a larger share of the nascent electric car market than in ICE vehicles, as the passenger car market becomes fully electric. The Citroen C3 EV, scheduled for launch in early 2023, will drive that strategy in India primarily targeting its aspirational mid-range segment.

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