The CEO of the Stellantis group, Carlos Tavares, has expressed his position on the continuous increase in car prices.
Carlos Tavares launches yet another alarm on ever-increasing car prices . During a question and answer session with US reporters, Stellantis ‘ Chief Executive Officer reiterated his concerns about the seamless price hike, which is pushing a significant chunk of potential customers out of the market. The reasons are different, but the CEO cited shortages of components and inflationary pressures – also linked, if not mainly, to the consequences of the conflict between Russia and Ukraine – on the prices of raw materials.
Therefore, an unstoppable and difficult increase in costs is taking place for the manufacturers: “I am very worried about the effect on the accessibility of vehicles. It is an issue that, with the growing inflationary pressures , is turning into something much more than problematic ” .
Carlos Tavares outlined the different reasons behind the increase. The shortage of microchips has, for example, led to frequent production cuts and, therefore, a scarce availability of product at the points of sale and the impossibility for the latter to meet the demand of buyers. In addition, the costs for raw materials have increased and, concurrent with the invasion of Ukraine by the Russian military, there has been a sharp acceleration to the upside.
Electric: it is essential to rationalize expenses
The question of costs closely affects the electricity sector. The CEO of the Italian-French group confirmed his idea about cars on tap , destined to have prices far higher than those of endothermic vehicles, at least in the medium-short term, and on the need to quickly rationalize expenses, in order to avoid to pass this on to the buyers. Otherwise, “the middle classes would not be able to buy new cars,” he pointed out.
“You may not like the fact that we are too frank or too transparent, but, in a sense, suppliers should express some gratitude that we are waking up early enough for them to prepare,” he concluded.