New Stellantis boss on how firm will continue UK manufacturing

What is the current status of Ellesmere Port and what can we expect at Luton?

“There has been a €100 million investment for a huge transformation of the plant from internal combustion to EV. It's a big investment and I hope to do the same at Luton. If you compare production now to 20 years ago, then Vauxhall is one of the few survivors - and it is here for the long term.

“Ellesmere Port has been safeguarded for the future with electrification for the long term. Luton will continue with its products to the end of the cycle and future investments come at the end of the cycle. But I would like to pull that forward if we can, and I'm trying very hard to get electric vans built in the UK.

“The final Astra at Ellesmere Port was built at the end of March. That was the last internal combustion car to come from there. Now we are in transition, a huge transition. We are also reducing the footprint of the factory by half, which creates more efficiency. We are also looking to invest in renewable energy. This is not easy but we want to put in solar and wind farms to be self-sufficient. The plant will be ready in the first quarter of 2023.

“We are investing elsewhere, too. For example, we are future-proofing boilers at the plant by allowing them to run on hydrogen. This shows we are very focused on the environment, with a goal to be net zero by 2028, and cut carbon down by 50% by 2030. We’re not just looking at products but how we built them. This is part of a massive transformation of the company [Stellantis, as well as Vauxhall]. Stellantis will invest €30 billion by 2025 in electrification and digitally enabling the company, including transactions with customers.”

How will the way customers buy Vauxhalls change?

“The model has been the same since God was a boy with transactions. There has been no transformation in the way people acquire cars. But like anything it evolves, and we have massive learnings from Covid. Dealers did click and collect, and digitally engaged as well with customers. We will always need a physical network and presence, but how to make that more efficient?

“One change there will be is that the time of cars in compounds is over for everyone. We are all working to a leaner supply chain. There are huge cost pressures with energy and raw material costs up, which is putting huge pressure on businesses. Then there are the investments in new technology and electrification, so you need to carefully manage pipelines.

“So don't expect cars on forecourts and the wholesale model. It will be much more to order, which is why we’re driving to online ordering for people to order the right product at the right price. The wholesale model does not suit the customer.”

What does the agency model mean for Vauxhall?

“Agency for us is a manufacturer taking more on in managing the customer and the customer journey. The retailer will facilitate the product to customers, and the aftersales experience, but it will be less of a push model for a better customer experience. This will be much better on transparency and the role of retail haggling disappears to give customers products at the right price and a fair price.

“We see a long-term role for retail partners. Buying a car is not like buying a vacuum cleaner online as you need to test and experience it. But customer visits to retailers are down from four to one and a half in 25 years. People can go online now to be informed. They are looking for reassurance on products and we need to get in line on that journey. We will take a much stronger input into customer journeys and it'll be wrong not to as this is where customers are.”

How do you rate the rollout of a charging infrastructure in the UK to support the rapid growth in electric car sales? And what did you make of the government’s recent charging strategy document?

“There is a lack of a joined-up approach in government departments. Government is very rigid in funding projects. You need a much more progressive approach to create a mechanism that funds itself. If you look at other markets like Norway and Oslo where there is a joined-up approach with planning, transport and the treasury, you get faster adoption. We instead go to local councils, who are underfunded and stretched.

“We need the government to put in clearly defined targets now for charging in places like out of the city, in tower blocks, and with destination charging. In the report, there were no clearly defined commitments on what is coming and when - and you could argue if the investment is adequate. So the commercial sector will pick up the slack.”

What are your current lead times for new cars with the current semiconductor chip shortage? Is there an end in sight to the crisis?

“Lead times we don't discuss. Before, we anticipated it [the chip shortage] would be better by this summer. Last September, it was at its worst. We expected to build 22,000 cars in September, but it was only 12,000. This is not just Stellantis but the whole industry. We expected better by now, but now we don't anticipate it will get better until the end of the year for an unblocked supply chain.

“For orders, we are not seeing cancellations [due to long wait times]. If they walked to a competitor, they would be in the same boat. We have not seen a decline in orders and they've held up well. Sales peaked in 2016 and have fallen significantly since then due to Covid constraint and then chips, but they will come back and we are sitting on an order bank first, which will wash out.”

How much demand is there for your electric cars?

“The orders we take on plug-in cars, which are mainly Corsa-e and Mokka-e, is about 27% of our total orders. But it is difficult to judge demand. If you look at SMMT data [for monthly registrations], this is not a good reference as that's just what you've built, and has no insight on chip allocation. But we do know of order intent, and that takes it higher so it is moving fast. Next we will see this in vans, as vans are still behind cars [in adopting electric] but there is definitely a need for EV vans.

“Look at cities: the increase in miles driven is not from HGVs or cars due to congestion charging, but in vans. So we need more electric vans, which are perfectly suited to final-mile deliveries. Vans are two years behind cars but will catch up for sure.”

What barriers remain for people adopting electric cars?

“There is no anxiety with customers on the technology, and you have a higher customer satisfaction on EVs than internal combustion cars, with no product issues. There is a long way to go still, but we are beyond the tipping point now.

“There is still a job to do on the cost of running an EV. There is a perception that the list price is higher, but if you do 8000 miles per year, a Mokka-e is cost neutral compared to a petrol car. So you need to communicate not on list price but the cost of running it.”

Can you describe the relationship between Vauxhall and Opel?

“We have a strong umbilical cord to Opel, but the Vauxhall team gets heavily involved in all future developments and technology. At a higher level within Stellantis, it is all common platforms and technology across all Stellantis brands."