Greetings from New Delhi! For years, the global auto industry has tried to convince investors that the future will be defined by software, electric vehicles and self-driving technology.
This week, Stellantis (STLAM.MI) delivered a reality check.
The carmaker unveiled a €60 billion ($70 billion) strategy that leans heavily on partnerships and pragmatism over ideology. Meanwhile, Volkswagen (VOWG.DE) was forced to reassure workers that it was not handing over excess European factory capacity to Chinese rivals. And Japan found itself squeezed again by Beijing over rare earths - a reminder that the future of mobility still depends as much on geopolitics, supply chains and technology as it does on China.
In other news, the pressure from high fuel prices and shipping disruptions triggered by the Iran war is beginning to reshape markets from Pakistan to Japan and forcing India’s biggest carmaker Maruti Suzuki to adopt austerity measures.
Which brings us to today’s Auto File…
Stellantis’ new era of alliances under Antonio Filosa
Volkswagen tries to calm nerves over China
China tightens its grip on rare earths, again
Stellantis embraces partnerships in €60 billion reset
Stellantis laid out a sweeping €60 billion strategy this week that marks a clear shift under new CEO Antonio Filosa.
Unlike former CEO Carlos Tavares, whose strategy relied heavily on internal execution and aggressive cost cutting, Filosa is leaning into partnerships to reduce costs and accelerate product development timelines.
The group plans to launch 60 new models by 2030 spanning combustion engine, hybrid and electric vehicles, while also simplifying platforms and trying to monetize its chronic problem of excess factory capacity.
The list of partners says a lot about where the industry is heading.
On manufacturing, Stellantis is expanding ties with Chinese automakers Leapmotor and Dongfeng, while also working with Tata Motors and Jaguar Land Rover in the United States. On technology, it is relying on companies such as Qualcomm, Applied Intuition and British self-driving startup Wayve.
The message from Filosa is clear: legacy automakers can no longer afford to do everything themselves.
That may end up being the most important takeaway for others as well.
Recommended reading:
Volkswagen walks a tightrope on China and overcapacity
Volkswagen CEO Oliver Blume used a workers’ assembly this week to publicly deny reports that the German automaker was in talks with Chinese manufacturers about using excess factory capacity in Europe. You can read more here.
The fact that he had to address the issue at all says a great deal about the anxiety inside Europe’s largest automaker. Volkswagen is grappling with a painful reality confronting much of Europe’s auto industry: too many factories, weak demand and rising Chinese competition.
Blume acknowledged that Volkswagen still has excess capacity in Europe and Germany and that the issue must be addressed to remain competitive. But he also tried to reassure workers that there were “currently no plans or discussions with Chinese manufacturers.”
But the economic pressure is only growing.
Stellantis has openly embraced partnerships with Chinese firms to help fill unused capacity. Volkswagen, for now, is trying to buy itself time.
China halts rare earth exports in tiff with Japan
China has halted exports of several heavy rare earth materials to Japan since January, according to Chinese customs data and industry sources, reviving memories of the geopolitical standoff between the two countries in 2010.
The timing is striking as it coincides with a broader deterioration in relations between Beijing and Tokyo over Taiwan and mirrors China’s restrictions with the United States during the recent trade tensions.
The move matters enormously for the auto industry. Japan remains the world’s largest producer of rare earth magnets outside China, but it is still heavily dependent on Chinese supply for key materials such as dysprosium and terbium used in electric motors, aerospace systems and advanced electronics.
For automakers already struggling with geopolitical fragmentation, tariff uncertainty and supply-chain shocks, rare earths are becoming another reminder that the transition to EVs is deeply tied to resource security, and China.
Fast laps
India’s Maruti Suzuki has introduced some austerity measures to curb the use of petrol as fuel prices remain elevated. Employees have been advised to work from home on some days, if possible, carpool to save fuel and cut down on non-essential air travel.
