Stellantis confident on cost savings, announces China review By Reuters

By Nick Carey, Gilles Guillaume and Giulio Piovaccari

(Reuters) – Stellantis, the carmaker forged from the merger of Fiat Chrysler and Peugeot-owner PSA, is “very confident” of delivering its planned 5 billion euros ($6.1 billion) of synergies, including 80% within four years, its chief executive said on Tuesday.

Carlos Tavares’s comments came as Stellantis shares surged more than 10% on their New York debut, mirroring strong increases in its French and Italian listed stock since their launches on Monday.

In his first press conference as Stellantis CEO, Tavares also said he had created a task force to find out “what went wrong” for both Fiat Chrysler (FCA) and PSA in China.

The merger, completed on Saturday, has created the world’s fourth-biggest carmaker to help make the switch to the new era of electrification and automated driving.

“The purpose is not to be big, but to be great at what we do,” Tavares said.

Both PSA and FCA fared poorly in China, the world’s largest car market. Tavares said the task force, consisting of Stellantis’ top five executives, would work on solutions for a come-back there.

When asked if options could include finding a new local partner, Tavares said the company “would not exclude anything.”

In the run-up to their merger, PSA and FCA pledged not to close plants and Tavares said Stellantis’ ability to spread costs to invest in new vehicles would act as a “shield” against job cuts.

When asked about the future of the group’s Ellesmere Port plant in Britain and whether Stellantis would invest in electric vehicles there following the conclusion of a Brexit trade deal, Tavares said: “we are now reviewing those different scenarios.”

“We are now deciding where we are going to put those investments,” he said.

Stellantis will have 14 brands, from FCA’s Fiat, Maserati and U.S.-focused Jeep, Dodge and Ram to PSA’s traditionally Europe-focused Peugeot, Citroen, Opel and DS.

Tavares, who was previously PSA’s CEO, said all 14 brands would be given a chance “to rebound” and invest in new products as the group focuses on profitable growth.

Stellantis will launch 10 new electrified vehicle models in 2021, he added.

($1 = 0.8244 euros)