Stellantis Ask European Suppliers To Lower Prices By 6%

In the midst of a significant transformation in the automotive industry, Stellantis has reached out to its European suppliers with a request for a 5 to 6% reduction in component costs. The multinational corporation’s bid to enhance cost efficiency aligns with the evolving business landscape, signaling a pivotal moment for the sector.

The request, outlined in a letter addressed to its suppliers, opens with a statement emblematic of the industry’s changing tides: “Dear supplier, the automotive industry is going through a major transformation. To support the needs of the business, we must take a step forward and improve cost performance. Therefore we ask you to efficiently manage the cost policy.” This missive, reported by the Turin edition of Corriere della Sera, serves as a catalyst for Stellantis’ drive towards more streamlined cost management.

This appeal for reduced expenses echoes a previous call made about a year ago, where Stellantis sought a comparable 5 to 6% discount. However, the current announcement arrives at a critical juncture, coinciding with pivotal corporate decisions impacting flagship models such as the upcoming Fiat Panda and the latest Maserati Quattroporte.

Of particular significance is the confirmation that the new Panda’s production will take place in Serbia, diverging from traditional Italian manufacturing hubs like Mirafiori or Pomigliano. This strategic shift has raised concerns among institutions and trade unions regarding the evolving production landscape.

Addressing supplier concerns, Stellantis reassured that forthcoming models, particularly under the Maserati marque, will be entirely conceived, engineered, and manufactured in Italy, incorporating electric motors. This strategic maneuver aims to enhance cost-effectiveness and bolster competitiveness in the burgeoning electric vehicle market, reflecting a pivot in production locations and negotiations for supplier discounts as integral components of this strategy.

However, uncertainties linger, especially within Stellantis’ primary production hub, Mirafiori. Despite initiatives like the Green Campus, Battery Plant, and Circular Economy Hub, the absence of new model introductions has sparked apprehensions about the site’s future trajectory. The recent offering of redundancy incentives, attracting nearly a thousand white-collar workers, further underscores the complexities faced by the company’s operational dynamics.

The decision to suspend the M9S (new electric Quattroporte) project at Mirafiori has sent shockwaves throughout associated industries, precipitating a decline in order volumes and intensifying demands for additional discounts on car component prices from suppliers. This tumultuous scenario compounds Stellantis’ sales woes, evidenced by a 2.6% decrease in November.

Amidst these challenges, concerns heighten over the potential postponement of the new version of the 500e until 2030, reflecting apprehensions within and beyond Stellantis amidst a market witnessing the rise of affordable, small cars, particularly from Chinese manufacturers. In Turin, trade unions emphasize the urgency of job security and seek clarity on Mirafiori’s future plans amidst these developments.

Source: Corriere Torino