Wednesday, May 22, 2024
NewsCarlos Tavares Worried About New Vehicle Prices

Carlos Tavares Worried About New Vehicle Prices

stellantis' CEO believes the price of new vehicles is going to keep increasing

If you’re shopping for your next vehicle these days, you probably know that prices are exorbitant and it’s almost impossible to negotiate a discount, especially with the pandemic or the semiconductor shortage. In fact, the recent conflict in Ukraine may even prolong this irregular situation.

If that’s the case, you’re not alone. In fact, Stellantis‘ President and CEO, Carlos Tavares, has expressed concern about the issue. The average price of a car transaction has increased over the last few months, while the phenomenon of inflated prices by the various car dealerships, especially when it comes to new models in demand, should not be forgotten.

The head of the Stellantis group even indicated in an interview with the Detroit Bureau that he was concerned about this trend of rising prices for new vehicles.

As he reminds us, several factors are linked to this increase in transaction prices, such as the famous semiconductor crisis, but there are also the prices of raw materials such as steel, aluminum or even nickel, to name a few.

Mr. Tavares also recalled that the price of future electric vehicles planned by all of the group’s automotive divisions would surpass that of gasoline-powered vehicles in the short and medium term. Moreover, he is also concerned about the purchasing power of the middle class, which he believes will no longer be able to buy new vehicles. In fact, the head of the company was reassuring, adding that he would have to find new ways to save money (in the assembly process) in order not to pass on the bill to consumers.

Savings in marketing and the distribution network would be considered, the two areas that are responsible for about 30% of the price of a new vehicle.

Unfortunately, the price of new vehicles is not going to go away any time soon, but it’s reassuring to see that a manufacturer like Stellantis is concerned about the purchasing power of its customers, especially for popular brands like Dodge, Fiat, Jeep or Ram, to name just a few of the manufacturer’s distributed in North America.

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