Carlos Tavares, Stellantis’ global CEO, has announced that Leapmotor will enter the Indian market in Q4 of 2024 as part of Leapmotor International’s global expansion strategy.
Tavares told global media that the company may look at manufacturing of local products in India to overcome high import duties, but the decision is yet to be taken.
Chinese EV brand Leapmotor, which entered into a binding agreement to sign a 51:49 joint venture (JV) with the Amsterdam-based Stellantis, with the latter holding the majority – concluded the deal in a short span of 7 months on Tuesday.
Autocar Professional broke the story in February and reported this week that Leapmotor will bring the T03 and C10 to the Indian market.
Announcing the next step for the venture, Tavares said, “We are now going to go live. We are now in the planning phase to go to the markets and start exporting vehicles out of China to the rest of the world. And as we said this morning, planning is 10 percent, and execution is 90 percent. So, we are entering the execution part of our deal.”
This Leapmotor International joint venture aims to sell and manufacture Leapmotor vehicles outside China.
Leapmotor will enter nine European countries in the first phase starting September 2024, including Belgium, France, Italy, Germany, Greece, the Netherlands, Romania, Spain, and Portugal. The brand will be sold across 200 dealerships in the region.
Stellantis is now in the process of homologating all of those models in the European market. After that homologation, sales will start in September 2024.
In Q4 of 2024, Leapmotor International will enter the South America, Middle East, Africa, India, and Asia Pacific regions, informed Tavares.
“With the combination of the nine European countries, plus the three additional regions, we expect to bring a significant growth of Leapmotor models,” Tavares added.
When asked if Leapmotor would consider local manufacturing in India, Tavares said: “The tariffs to import CBUs in India are very high. So most probably if we were to bring Leap Motors to India, it would have to be through local manufacturing as it is for all the other brands we have in India.”
He also noted that the management is yet to study India’s new EV policy that allows companies to import cars at a lower duty on certain cars for a limited time, provided they commit to local manufacturing.
“It certainly helps. This is an opportunity that we did not study yet. But I understand the intention and I understand why it can be a good win for the country and for the carmaker that will come with EVs,” Tavares added.
Elaborating on the benefits of this arrangement, Tavares says this deal offers 4 benefits. It enables the JV to accelerate the way to go to market with smart and affordable EVs, bringing in the latest technology from Leapmotor, supporting the Dare Forward plan of Stellantis to reduce emissions by 50% by 2030 and use an asset-light model to execute the plan.
“Affordability is right now the number one problem with EV expansion worldwide. With Leapmotor, we are going to be able to bring faster to our markets affordable EVs that will not only contribute to the profitable growth of Stellantis, but of course, they will also contribute faster and in a more efficient way to fixing the global warming issue that we have to fix as humanity,” said Tavares.
The JV plans to bring in a portfolio of 6 models by 2027.
“The ultimate goal is the zero emission vehicles. The JV will help in offering affordable vehicles,” he added.
On a specific question of whether Stellantis will be assembling these vehicles in India, Tavares said severe customs duties or tariffs are a good opportunity for the company to use Stellantis’ local manufacturing footprint. Still, it has to make a business case.
“So, we are keen on creating that opportunity for Leapmotor International if that makes economic sense. So, there is no limitation, of course, for Leapmotor International to use our manufacturing footprint inside of India if that was to be the best business case,” Tavares noted.
Synergies beyond using Leapmotor models would be a topic of “separate discussions” if they deliver win-win opportunities for both companies.
Leapmotor will commence its India innings with the T03 hatchback, which will be aimed at Tata’s Tiago EV. The brand would also introduce its five-seater SUV, the C10, to take on BYD’s Atto3, MG Motor’s ZS EV, the upcoming Creta EV and Maruti eVX, among other electric SUVs in that segment.
The company conducted a feasibility study this year and the decision has been made; the announcement could happen very shortly and the India entry is likely by year-end, sources added. The Indian versions of C10 and T03 will be based on those developed for the European market. The company is likely to introduce models from the A to C segments, and add more MPVs, SUVs and hatchbacks in future.
Leapmotor, which sold a 20% stake for €1.5 billion to Stellantis in September 2023 to create a 51:49 JV with the latter for its international expansion, sees India as one of the key markets. Leapmotor vehicles are likely to be sold via Stellantis India’s existing dealers, which have seen suboptimal volumes so far. Adding a third brand would draw more buyers to these showrooms that currently retail Jeep and Citroen models.
“The long-term product strategy in India is still under discussion with the Stellantis’ product-planning teams in Germany and China,” said one of the sources who did not wish to be named. The short-term plan is to export completely built imports before the assembly and manufacturing can start here.
“The whole global market expansion is based on the strategic cooperation with Stellantis. Leapmotor will leverage its resources locally in many markets it enters, including the manufacturing facility and dealer network,” the source added.
Leapmotor plans to double its China volumes to 3 lakh units this year and expects sales in international markets to reach almost 1 lakh units by 2025 from 10,000 in 2023. While the number of electric vehicles available in India is still very low, Maruti Suzuki, Hyundai, Mahindra & Mahindra and Tata Motors together have lined up close to a dozen new models for launch.