6:14 am, July 4, 2024
Stellantis boss Maria Grazia Davino has doubled down on her threat to pull UK production if the incoming government doesn’t help the car industry out further.
Speaking exclusively to Car Dealer in a wide ranging video interview (above), Davino said that if the UK car market became a ‘bloodbath’ she could be forced into making a decision about closing the plants.
She said ending production at Ellesmere Port and Luton was something she would ‘have to consider’ if the new government doesn’t listen to the car industry.
And she called on the new government to be ‘consistent’ and ‘cooperative’ with the car industry and act quickly to introduce incentives to boost electric car demand with retail buyers.
Top of her agenda is a cut in VAT for electric cars and ‘fiscal incentives’ to boost demand – and she warned that shutting the UK factories was still very much ‘on the table’ if the industry doesn’t get any help.
Davino was reiterating comments she made last week at the SMMT Summit about ZEV mandate targets that dictate 22% of all cars sold this year must be electric.
Speaking about the potential factory closures in the video interview [11:18], she said: ‘I have said there is no decision on this and I do not have it on top of my agenda but I will have to consider it.
‘It is not the purpose of a businessperson to threaten and I was not blackmailing anyone, but the question [of closing the plants] is a rational one and I tried to give a rational answer.
‘This has been a conversation we have made very transparently, since April, with the government.’
Referencing a likely change in power after the General Election today, Davino said she does not think an ‘immediate reaction’ will be needed.
‘It’s on the table,’ she added. ‘But I don’t have any rational intention to threaten anyone.’
Asked what needed to change to encourage Stellantis to keep production in the UK, Davino said the conversation with the new government would have to be ‘productive’ and that demand for the firm’s cars would have to improve.
‘We have to listen to each other – Stellantis is bing enough to listen – and then overall we have to sell better and we have to be more profitable and see that this trajectory that we will work hard to keep in this country shows that it is all good and that we are progressing,’ she said.
‘If we are making progress in a way that is sustainable then of course I will defend the UK production operations.
‘If it’s going to be a bloodbath then it does not make sense, not only for Stellantis, but for anyone. And in this case I will have to take other decisions.’
The Stellantis UK group MD now wants to see an incoming government put its hand in its pocket to incentivise electric car purchases.
She said: ‘You have to give a customer a very good reason to buy and this cannot only be environmental responsibility or good offers from the OEM.
‘Salary sacrifice schemes and the corporate car business are doing well [with EVs] because they are getting a fiscal advantage, but it’s too unbalanced.
‘We need some fiscal adjustment for people that buy mainstream products – cash incentives help, infrastructure helps and then lots of communication around it.’
Stellantis operates Vauxhall, Peugeot, Citroen, DS, Fiat and Alfa Romeo, Abarth and Jeep in the UK.
VAT cut
Davino also spoke about how she thinks Labour’s plan to pull the petrol and diesel car ban forward again to 2030 was a ‘good thing’ as the message it gives consumers is that EVs are the right car to buy now.
She said this would make the ‘purchase consideration more compelling’ especially if it was combined with a cut in VAT which would give EVs a ‘material advantage’.
Davino also explained that Stellantis has decided not to pay any ZEV Mandate fines – some £15k per car over the target – and will do this by throttling back petrol and diesel car supply later this year.
‘We are trying not to do this, but it will be an immediate consequence,’ she said.
‘[Fines] are not an option for me. It’s not the way we are set up – we will not pay fines.’
Speaking about Chinese car manufacturers – and the threats of import tariffs – Davino said that Stellantis believed in ‘fair and free trade’ and wasn’t keen to see competitors penalised.
And she also spoke about how she is tackling cars stuck in ports, late payment of bonuses to her dealer partners and how agency sales will be delayed to at least 2027. And explained some petrol and diesel cars could be removed from sale if it looked like the firm would miss its ZEV Mandate targets.
You can watch the video interview in full at the top of this post.
