Stellantis is eager to be successful in the Chinese market and will release its Chinese market strategy at the end of the year.

At the Shanghai Auto Show, which opened on April 19th, Mr. Gr é goire Olivier, member of the global executive committee of Stellantis Group and chief operating officer of China, said in an interview with the media, including Gesco, that as one of the largest auto groups in the world, Stellantis attaches great importance to the Chinese market and is eager to succeed in the Chinese market. He believes that China is not only the largest auto market in the world, but also making progress in areas such as new energy and intelligent vehicles, which represent the general trend of the industry, Extreme Speed. To this end, the Group is making strenuous efforts to study and formulate a strategy for the Chinese market. The strategy will be released by the end of this year.

As the merged entity of the former FCA and the former PSA Group, Stellantis manages and operates as many as 14 brands. In the Chinese market, how to distribute the focus of business and improve sales has become one of the issues of concern. In addition, in the face of the changes in the competition pattern of the industry brought about by the continuous entry of new forces, as well as technological trends such as electrification and intelligent network connection, what kind of thinking does Stellantis have and what layout has it done? What other measures will be taken in R & D, manufacturing, distribution channels and so on in the future? Please see the interview record below:

Hello, everyone, Olivier (Gr é goire Olivier):). Thank you very much for coming to this media exchange meeting today.

Stellantis Group was just established on January 17 this year, and it has been only three months since its establishment. After I became the COO (Chief operating Officer) of Stellantis Group in China, the first thing I did was to set up a senior management team of operations and management in China. At present, this work has been completed, and half of the talent in the executive team comes from the former FCA Group and half from the former PSA Group. The management team has been announced internally, and the heads of various important areas, including procurement, finance, personnel, sales, communication and so on, have been appointed. We attach great importance to the construction of a team of localized talents, many of whom are localized talents in China. Now it is becoming easier and more convenient for China to find the localized talents it needs.

After setting up this new management team, I just signed a lease agreement last Friday to locate the headquarters of Stellantis Group in China in Shanghai Caohejing Development Zone. We will move the team there before the end of May.

We will also have a large R & D team in Shanghai. The former PSA Group R & D center in China is located in Caohejing Development Zone, and the former FCA Group R & D center in Shanghai Zizhu Science and Technology Park. These two places will also be our main offices in Shanghai.

Although the Stellantis Group has only been established for three months, the auto show also brought a lot of bright new cars, including five new models. Today, we showed off the brand new C5X, called Versailles in Chinese, at the Citroen booth, which is now one of the most high-end models of the Citroen brand. Versailles was built for the king in France, and we hope the C5X will provide king-like enjoyment for Chinese consumers. Three new cars were unveiled at the Peugeot booth, namely, the new Peugeot 4008, the new Peugeot 5008 and the new plug-in hybrid version of the Peugeot 4008. At the JEEP booth, we opened the pre-sale of the plug-in hybrid version of the Wrangler 4xe. It not only satisfies customers' pursuit of pure power, but also provides a more environmentally friendly car use plan. Compared with its gasoline version, this plug-in car has a full 80 kilowatts of power and 237 Nm of torque.

Reporter: would you like to know whether the focus of work in China after the establishment of the new group will be around the business of the previous PSA, or do you want to improve the business of the previous FCA?

The business of Olivier (Gr é goire Olivier):) former PSA and former FCA is the focus of our work now. 2020 is indeed a bit difficult for us, but Peugeot, Citroen, JEEP, DS and Alfa Romeo brands are all committed to faster sales growth. Since the beginning of this year, we have indeed achieved a state of gradual increase in sales.

In Shanghai, all departments of our team are also working closely together. Our R & D center is conducting some local research and development, such as adaptive research and development of battery packs for new energy vehicles. We also have a purchasing team in Shanghai, which will purchase in China and then supply to the group's global projects. As I just mentioned, we currently have two main offices in Shanghai. Now we have a good integration of the former FCA and the former PSA team, and everyone has quickly entered the role.

Reporter: now the whole automobile industry is facing the impact of chip shortage. There are media reports that the production of Stellantis Group's factories in Europe, such as Spain and Germany, has been affected. I would like to ask what is the impact on the production of Stellantis in China?

Olivier (Gr é goire Olivier):) actually the chip shortage problem has a very limited impact on our operations in China. Our two joint ventures, Guangzhou Auto Fick and Shenlong, have been slightly affected, but very little.

Reporter: at present, the competition for cars in China is very fierce, including not only traditional car companies, but also new forces. Many Internet technology enterprises have also joined the car manufacturing industry. What do you think of this phenomenon?

Olivier (Gr é goire Olivier):) as we all know, the global automobile industry is experiencing the trend of electrified energy transformation. At present, China and Europe are in the forefront, while the United States lags behind slightly. European and Chinese regulations are also driving automakers to develop and sell more new energy vehicles. As you just said, there are indeed many "newcomers" in the field of new energy vehicles. We welcome the power of new cars, which will bring competition and encourage us to do better.

We now have a lot of investment in the whole industry chain of new energy, such as motors, electric gearboxes, batteries and battery packs, to ensure that we develop and produce pure electric vehicles or plug-in hybrid cars. can bring the best choice for consumers.

Reporter: I learned that you visited some stores of European maintenance projects before. Would you like to know how European maintenance projects are being carried out in the Chinese market? Is there any possibility of synergy between the layout of the group in the after-sales field and the business of the joint venture company? How much does these new projects in the after-sales field improve the quality of the group's operations in the Chinese market?

Olivier (Gr é goire Olivier): aftermarket) is a fast-growing industry in China, so we decided to bring the brand EUROREPAR (European maintenance) to China, which is an after-sales service brand owned by Stellantis Group. We are gradually expanding our outlets and stores, and those independently owned by third parties can operate under the EUROREPAR (European maintenance) brand after they are authorized by us. This is the after-sales service strategy of Stellantis Group. For the group's joint ventures, they also have their own after-sales brands and their operations.

Reporter: what support will the group provide for the development of the Chinese market this year? What is the group's sales target in China this year?

Olivier (Gr é goire Olivier): Stellantis) is one of the largest automotive groups in the world, and we are among the best in Europe, North America, and South America, but the performance of the former PSA and the former FCA Group in China a few years ago was not very satisfactory. But we always believe that China is a very important strategic market, the Chinese market is the world's largest automobile market, and in the field of new energy vehicles, China also leads the global wind. In a sense, China's auto market represents the future.

We are also very eager to succeed in China. Our R & D center in Shanghai has more than 1300 engineers engaged in research and development in the field of complete vehicles and spare parts, involving new energy vehicles, automotive interconnection and other fields, and the results are shared globally. We also have a large purchasing team in Shanghai, they will have a lot of parts procurement projects, such as batteries, which will participate in global procurement projects, so our business in China is not only manufacturing and sales, but will cover a wider range of areas. So in this respect, our success in China is critical, and we will make continuous efforts to improve the group's performance in China in the next few years.

In addition, the Group has always attached great importance to the Chinese market. Mr. Tang Weishi, our global CEO, is personally leading a special research group, which is composed of five members of the group's top management team. I am also one of them. We are studying the group's future strategy in the Chinese market, which will be released by the end of this year.

In terms of sales, we are facing an unsatisfactory situation in 2020. 2020 does have some difficulties for Peugeot and Citroen. However, since September last year, sales have achieved month-on-month growth, and the growth trend has been maintained until now. Today, the two brands bring a total of four new models, three from Peugeot and one from Citroen. It is hoped that with the launch of these four models, our sales will be further improved. The same goes for JEEP and Alfa Romeo, where sales are growing and recovering month by month. With the launch of the 4xe plug-in hybrid model today, it is believed that our imported JEEP sales will achieve greater growth.

With regard to sales targets, because our joint ventures, Shenlong and Guangzhou Auto Fick, have not announced specific annual sales targets, and we will not release an integrated sales target as Stellantis China, there is no more content to share for the time being.

Reporter: you just talked about manufacturing, R & D, what new measures will there be in marketing?

Olivier (Gr é goire Olivier):) in terms of marketing, today Peugeot released a new brand LOGO, a new brand identity, reflecting the profound history of Peugeot brand in the field of automobile manufacturing.

Reporter: now China's auto market is moving in the direction of electrification and intelligent driving. Does Stellantis have any relevant strategies and plans?

Olivier (Gr é goire Olivier):) in terms of electrification, both Chinese and European laws and regulations require automakers to account for 10% to 13% of new energy vehicle sales; regulations in the US market will be implemented a few years later. But in any case, if a carmaker does not step up its electrification transformation, it will no longer have a place in the car market in the future. In the process of electrification, the Chinese market and the European market have maintained the progress of Synchronize, and the progress is very fast, so we should have a good understanding of the situation in both markets. Every new car we release in the future will have an electrified version, either pure electric or plug-in hybrid. The proportion of the group's products has now reached 35%, and we hope to increase it to 95% by 2025. At the same time, we hope to be deeply involved in the entire electrification value chain, and there will be related R & D and investment in many areas, such as batteries, motors, electric gearboxes, and many other spare parts. such as electrification system, electrification production platform and so on, there will be layout.

With regard to autopilot, as far as we know about consumers, consumers are most interested in L3 autopilot, that is to say, on the highway, they can get their hands off the steering wheel or encounter traffic jams. When the speed is very slow, the autopilot function can be turned on and the system can automatically take over. These functions are very practical for consumers and can be used every day. But for higher levels of autopilot, such as L4 and L5, under this level of autopilot, you can have Rest (which belongs to full autopilot) in the car. As far as we know, consumers are not so interested, and people are most interested in L3 autopilot.

Reporter: I just mentioned that the proportion of electrification is 35% now, and it will increase to 95% in the future. Does this mean the Chinese market or the global market? What time does the future mean?

Olivier (Gr é goire Olivier):), which refers to the global group, currently stands at 35%, and will reach 95% by 2025.

Reporter: electrification is the trend now, but the ultimate goal of everyone in the future is to achieve complete electrification. The promotion of electric products must be put on the agenda. Which brand will the first electric car of Stellantis be put to promote? What are your plans for the future?

Olivier (Gr é goire Olivier):) some Chinese consumers want pure electric models, some prefer plug-in hybrid models, and some prefer pure fuel models. We want to provide consumers with more choices.

For example, Peugeot's 2008 model has an electric version as well as a traditional internal combustion engine version. So, in fact, we already have a pure electric version in China, which is Peugeot's e2008. We also plan to import DS's all-electric model DS 3 to China for sale, which may be achieved by the end of June this year. The new 4008, just released today, has a traditional internal combustion engine version as well as a plug-in hybrid version. For the same model will provide different versions, consumers may take into account the space, appearance, but also take into account the power system, we hope to provide you with more choices, so there will not be a pure electric version of a car.

Reporter: at the previous press conference, cost reduction was regarded as the top priority of Stellantis Group. What other measures will Stellantis Group take to reduce operating costs in China in 2021?

The merger of Olivier (Gr é goire Olivier): former FCA and former PSA) will bring global synergy of about 5 billion euros per year, which will be realized in 3 to 4 years' time. This is why it is very important for us to merge, because synergy can reduce costs and enhance the competitiveness of the group.

The synergy effect will be realized mainly from the following aspects:

First, the field of research and development. Because electrification is the trend of the future, the investment and R & D cost of Stellantis Group in batteries, motors, electric gearboxes and so on will be very large. However, after the merger of the two groups, the new Stellantis only needs to do the relevant work and input once, but does not need to be repeated twice, and the total cost will be shared by the previous two groups, so there will be great savings in R & D, and it will be the biggest cost savings.

Second, procurement. Both the former FCA Group and the former PSA Group have a large global procurement demand, and after the merger, the procurement of the new group has a greater scale effect, so that we can purchase the necessary parts at a better price, which will also be a big part of the cost reduction.

Third, IT and software. Big multinationals actually have a lot of investment in IT and software, and we will save some money in this area after the merger.

Fourth, networks and channels. As sales grow, the former FCA network may be used to sell former PSA products, and the former PSA Group's EUROREPAR European maintenance products can be sold on the former FCA network and vice versa. This is also a synergistic effect and can also reduce costs.

Reporter: China is the core market of Stellantis, including Peugeot, Citroen and JEEP. At present, there is some overcapacity and the sales performance is not very satisfactory. Is it possible to integrate some businesses of its brands in the future?

Mr. Tang Weishi, global CEO of Gr é goire Olivier): Group, also mentioned that there will be no factory closure in our merger, so the synergy is mainly achieved through the above four points.

Previously, the Dragon Wuhan No. 1 factory was sold to the government, but in fact, we are also in close discussion with the government, hoping to optimize the use of all kinds of resources. Because the government takes into account the economic development, it will need this land, and the Dragon may have some spare capacity, so we sell this land to the government to achieve a win-win situation.

Reporter: in the sales network, similar to the previous Peugeot and Citroen dual-brand stores, will the group integrate other brands of JEEP or FCA together to reduce costs at the sales level?

Olivier (Gr é goire Olivier):) We respect every brand because each brand has its own unique brand content and DNA, we want to maximize brand value. Maybe the dealers behind these brands are the same, the investors are the same, and the distribution network of 4S stores is the same, but we will respect each brand and sell models of different brands in their respective stores. Will not mix brand sales.

Reporter: has Stellantis considered a Chinese name?

Olivier (Gr é goire Olivier):) We may not consider the popularity of the name "Stellantis", not only in China, but also in Europe, the United States and other parts of the world. We would like you to know the names of the group's brands, including JEEP, Citroen, Peugeot, Alfa Romeo and so on. These brands also have Chinese names in China, and everyone is very familiar with them. The name Stellantis is very important to hedge fund managers, but they have known the name since the first day of the establishment of the group. It is a matter of popularity. JEEP is famous, Peugeot is famous, Citroen is famous, and we think the popularity of its brand is more important.

Reporter: do you have any plans to introduce other new brands to China?

Olivier (Gr é goire Olivier):) We first completed the merger this year, we all worked together to become the same team, and we are also working hard to improve sales. Mr. Tang Weishi, the group CEO, will announce the group's China strategy at the end of this year, and he will answer your question then.

Reporter: will Stellantis cooperate with China and some tier1 and tier2 suppliers in the future? For example, Huawei just launched the Huawei inside model two days ago. They don't build cars, they only work as suppliers.

Olivier (Gr é goire Olivier):), please look forward to the Stellantis Group's strategy at the end of this year.