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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Here's the latest this morning. Auto Earning's reflecting some big

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Speaker 2: challenges for the industry, with ford A Stellantis delivering disappointing results,

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Speaker 2: Stillantis opting to bring back old models and wearing price

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Speaker 2: cards after a massive drop in sales during the first

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Speaker 2: half of the year. Joining us now to discuss the

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Speaker 2: Stalantis CEO Carlos Stavaras. Carlos, great to catch up with you, sir,

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Speaker 2: difficult mourning for the stock. We're down about eight percent,

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Speaker 2: you know that. I want to talk about some of

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Speaker 2: the brands. I'm not sure how many people recognize or

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Speaker 2: realize how big this company is. So just give me

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Speaker 2: a couple of seconds to go through this. At the

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Speaker 2: premium end, you've got the luxury brand like Maserati. Then

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Speaker 2: you've got Alfa, Romeo Lancier. You've got Jeep, which of

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Speaker 2: course is well known here in the United States, Christ

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Speaker 2: the Dodge ramp over. In Europe, Citron, Fiat opal Pergo,

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Speaker 2: a buff which, of course Abbath is part of the

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Speaker 2: Fiat business. This goes on and on and on, and

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Speaker 2: I'm trying to work out this morning. Carlos Wather you're

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Speaker 2: committed to all of that that lineup those brands, or

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Speaker 2: whether some of them could become and spun off.

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Speaker 3: Oh there is.

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Speaker 4: First of all, you are right to say that the

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Speaker 4: automakers are under pressure. The auto industry is in a turmoil,

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Speaker 4: and as you are looking at the results, everybody is

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Speaker 4: going in the same direction. And for the time being,

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Speaker 4: as much as I am aware of, we are the

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Speaker 4: only guy in town with the double digit ay margin.

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Speaker 4: But you are right, we are under pressure. And to

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Speaker 4: your question about the brands, there is no taboo. There

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Speaker 4: is absolutely no taboo. The brands are intangible assets that

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Speaker 4: we respect. We believe that they are here to be leveraged.

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Speaker 4: We could celebrate this year the one hundred and twenty

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Speaker 4: fifth anniversary of Fiat and OPO, which demonstrates that the

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Speaker 4: brands are stronger than the legal entities, stronger than the

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Speaker 4: political regimes, and they can cross wars, survive and get better.

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Speaker 4: So we do respect the brands. We respect the fun

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Speaker 4: basis of the brands, but there is no taboo. If

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Speaker 4: they are not able to monetize the value that they represent,

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Speaker 4: then decisions will come. For the time being, all of

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Speaker 4: our brands with no exception, are profitable. It is not

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Speaker 4: by chance that we are a ten percent a Y

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Speaker 4: margin a car company the only want to be double.

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Speaker 3: Digit so far.

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Speaker 4: It is just because our brands are great, our products

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Speaker 4: are very appealing, and I will just use the example

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Speaker 4: of our Ram pickup trucks where we are again number

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Speaker 4: one in the gd Power Quality survey, which means that

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Speaker 4: our customers appreciate what our creative people are bringing to

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Speaker 4: the market. Now, it is true that the market is

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Speaker 4: in the turmoil. It is true that the transition that

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Speaker 4: we are going through is immensely challenging. And this is

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Speaker 4: a bump. There will be other bumps. This will last

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Speaker 4: for a few years. This is not a short term turmoil,

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Speaker 4: and the most resilient, the most focused, the most customer focused,

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Speaker 4: will survive, of course. And that also means, because that's

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Speaker 4: what I'm hearing, that cost reduction is not becoming a

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Speaker 4: tubway anymore. As you know, we have been working hard

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Speaker 4: on cost reduction for many years. We have not been

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Speaker 4: so popular, but now everybody recognizes that the customers want affordability,

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Speaker 4: The customers want a safe, clean and afford mobility. So

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Speaker 4: that's my comments to your great question.

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Speaker 1: Thank you, there's one question about cutting the cost of

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Speaker 1: the vehicle. There's another question about cutting costs internally to

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Speaker 1: offset some of the increased expenses. Shipmen's North America fell

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Speaker 1: eighteen percent in the last quarter, and I'm just wondering

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Speaker 1: whether some deeper cost cutting, to John's point, is required

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Speaker 1: to sort of bring that up to speed at a

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Speaker 1: time where the EV transition isn't spending as quickly as

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Speaker 1: people had planned.

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Speaker 4: For exactly and what you are saying, you say is

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Speaker 4: not happening as quickly as the people that planned for.

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Speaker 4: I would like, with all the respect to correct that

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Speaker 4: it is not happening as quickly as the political leadership

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Speaker 4: is expected.

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Speaker 3: What we are.

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Speaker 4: Seeing in the Western world right now is that the

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Speaker 4: consumers are not supporting as much as the political leadership

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Speaker 4: was expecting the EV rampop and the consumers they are

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Speaker 4: very clear in what they expect from us. They expect safe, clean,

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Speaker 4: and affordable mobility. And safe and clean they are affordable

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Speaker 4: is the challenge. So they want basically to buy EV

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Speaker 4: cars at the price of internal combustion engine cars. They

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Speaker 4: don't want to pay more for the EV technology, which

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Speaker 4: I can totally understand, and I want to tell them

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Speaker 4: that we are working super hard to achieve that, and

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Speaker 4: we already have evidence that we are succeeding because we

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Speaker 4: started to launch our first B segment EV cars from

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Speaker 4: twenty thousand euros a little bit more than twenty thousand dollars,

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Speaker 4: and we will bring to the US market in a

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Speaker 4: couple of years a Jeep model below twenty five thousand dollars.

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Speaker 4: So yes, we hear what they say, and we are

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Speaker 4: working super hard to deliver that. And indeed, the political

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Speaker 4: leadership through the regulations, thought that the consumers were able

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Speaker 4: and willing to pay a higher price for evs, and

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Speaker 4: they are telling us the consumers that they don't agree

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Speaker 4: with that. And we are in the middle. We are

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Speaker 4: the fuse between the consumers and the regulators. We are

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Speaker 4: trying to fix it, and of course it's difficult.

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Speaker 3: It's difficult.

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Speaker 5: In January, you said you were going to hold off

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Speaker 5: on some of your investments in the United States because

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Speaker 5: you wanted to see how the election played out. But

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Speaker 5: are you basically saying now it doesn't matter who gets

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Speaker 5: elected because the consumers are rejecting the government push towards

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Speaker 5: the EV models.

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Speaker 4: Well, that's not exactly what I am saying, it's a

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Speaker 4: little bit more complicated than that. What I'm saying is

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Speaker 4: that we have received loud and clear the message of

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Speaker 4: affordability that the consumer is asking us to deliver on evs.

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Speaker 4: The sooner we get there, the faster we are going

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Speaker 4: to ramp up. And the investments in the EV technology

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Speaker 4: are already done. What needs to be done now is

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Speaker 4: the investments in the capacity for the volumes. So the

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Speaker 4: investments in the capacity will be staged in function of

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Speaker 4: the adoption by the consumers. And the adoption by the

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Speaker 4: consumers is going to be function of our ability to

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Speaker 4: bring affordable vehicles to the market, which we are right

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Speaker 4: now doing. And I think it's going to have a

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Speaker 4: few bumps on the road. That's nothing specific or nothing surprising.

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Speaker 4: It is going to be a bumpy road, and we

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Speaker 4: will adapt the capacity investments to the adoption rate of

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Speaker 4: the consumers, which is going to be the consequence of affordability.

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Speaker 4: That's where we are, and we are bringing a lot

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Speaker 4: of proof points that we are achieving that starting with

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Speaker 4: European market right now, but it will come very soon

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Speaker 4: with your US, Carlos.

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Speaker 1: How difficult is it to compete right now with Chinese

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Speaker 1: auto manufacturers who really have a leg up in providing

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Speaker 1: affordable electric vehicles and are able to export some of

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Speaker 1: those to Europe. Right now, there are.

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Speaker 2: Gates in the US.

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Speaker 1: Are those gates positive or negative for you at a

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Speaker 1: time when you're a global car business?

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Speaker 3: Well that's a great question.

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Speaker 4: As we are a global car maker, and it was

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Speaker 4: pointed out that we had a fourteen plus one brand.

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Speaker 4: The plus one is a Chinese brand, Lick Motor. So yes,

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Speaker 4: we have fifteen brands and we are a global car maker.

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Speaker 4: As a racing team we are. We need to recognize

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Speaker 4: that being global means that we will not be protected everywhere.

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Speaker 4: For instance, we are not protected in Latin America, we

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Speaker 4: are not protected in Africa Middle East. So as a

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Speaker 4: racing team we are we need to confront ourselves with

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Speaker 4: the harshest competition. Right now, the harshest competition is China

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Speaker 4: and they have a thirty percent cost competitive edge against

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Speaker 4: US X workspaces and we are working hard to recover

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Speaker 4: those thirty percent cost competitive anticap that we have. And

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Speaker 4: it's good for a company like ours to be competing

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Speaker 4: with the harshest competition. That keeps us awake, that keeps

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Speaker 4: us alive, and we need to run fast and even

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Speaker 4: faster to compete. Then when we come to protected markets,

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Speaker 4: we have to realize that there are a lot of

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Speaker 4: side effects and collateral damages to protected markets and that

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Speaker 4: protection that may be nice in the short term may

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Speaker 4: have enormous disadvantages in the mid and long term. And

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Speaker 4: that's why we do not advocate custom duties. We have

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Speaker 4: to fight against the best. We have to make ourselves

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Speaker 4: better in quality, in appeal, in costs. This is the

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Speaker 4: way we can survive. And we used to say at

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Speaker 4: seventies the only thing that protects us is performance and

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Speaker 4: we deeply believe in that.

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Speaker 2: If that's the case, does that make it harder to

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Speaker 2: keep a production based in places like Italy?

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Speaker 4: It makes us harder in the Western world indeed. But

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Speaker 4: in the Western world we have more knowledge, more experience.

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Speaker 4: We should use our education, our scientific education, our capability

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Speaker 4: to work collectively to find padding breakers to compete.

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Speaker 3: It is possible.

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Speaker 4: The twenty three thousand euro mid trim EC three c

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Speaker 4: tuan is made in Europe, of course, in the lowest

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Speaker 4: cost countries of Europe.

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Speaker 3: But it's made in Europe. It's made inside of europe Act.

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Speaker 2: You know. The reason I ask is because there are

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Speaker 2: some Chinese producers looking for manufacturing base in Italy. You

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Speaker 2: of course have some production basis there. I wonder if

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Speaker 2: you'd be interested in selling them.

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Speaker 4: Well, it's a public information that all the European governments

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Speaker 4: are dating the Chinese carmakers to come to assemble their

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Speaker 4: vehicles in their countries. So all the European countries Italy, France, Germany, Spain,

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Speaker 4: they are all dating the Chinese.

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Speaker 3: Fine, So that's a fact.

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Speaker 4: So if you were to ask me, which is possibly

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Speaker 4: your question, would I would be willing to sell one

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Speaker 4: of my.

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Speaker 3: Plans to the Chinese?

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Speaker 4: I would ask you back a question, what is the

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Speaker 4: intention of the European Union if we are encouraged to

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Speaker 4: sell our plans to the Chinese? What will be the

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Speaker 4: sense and the purpose of inviting the automakers of Europe,

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Speaker 4: which represent fourteen million jobs, to end over their plans

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Speaker 4: to the Chinese? Does that make sense for the European citizen?

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Speaker 4: Of course it doesn't make any sense, which, of course

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Speaker 4: we know. So of course all businesses business will see

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Speaker 4: what the future will bring.

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Speaker 3: But we are here for the fight.

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Speaker 4: We are here to demonstrate that we have more appealing brands,

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Speaker 4: more exciting cars at the right level of affordability, with

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Speaker 4: the right performance and the right safety. So we are

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Speaker 4: going to fight. This is a competition. We love competition

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Speaker 4: and everything we do for Europe because the market is

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Speaker 4: much more open US market. Yeah, in terms of competitive

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Speaker 4: is of our technology will benefit our American brands because

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Speaker 4: Stanenttis is a global carmaker and the technology is available

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Speaker 4: for the fifteen brands of the company. Anything we do

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Speaker 4: to compete with the Chinese in Europe or in the

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Speaker 4: rest of the world will benefit, of course our US

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Speaker 4: brands to bring affordability and performance as soon as we

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Speaker 4: can to this market.

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Speaker 2: Colors, you've been super generous with your time. I just

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Speaker 2: want to return to my original question though, the way

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Speaker 2: you pose your response to that, the conversation that I

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Speaker 2: would have with a policy maker for the good of

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Speaker 2: the European economy and for the good of European labor,

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Speaker 2: it's a very different one to the CEO of an

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Speaker 2: order manufacturer. You, of course accountable to the shareholder and

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Speaker 2: the stock is down by nine percent as you know today,

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Speaker 2: this's a difficult day for Stilantis. So when I ask

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Speaker 2: you a question like, would you sell a production base

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Speaker 2: in Italy to the Chinese. I'm not asking you that

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Speaker 2: as a public official who needs to worry about the

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Speaker 2: size of the European labor market. I'm asking you that

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Speaker 2: as a seat yo, as the llansis. Is that a

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Speaker 2: good financial decision for you to make?

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Speaker 4: It depends if I am making profit out of that

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Speaker 4: facility or not.

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Speaker 2: When you're under capacity there on you.

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Speaker 4: I will make sure that we keep the capacity above

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Speaker 4: eighty percent each visiion rate. That's the threshold. As long

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Speaker 4: as you are above eighty percent, you can do a

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Speaker 4: good job, and.

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Speaker 2: Your confident you will be for the next twelve months

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Speaker 2: and beyond.

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Speaker 4: This is one of the things we have been discussing

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Speaker 4: with the Italian government. They keep on asking us to

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Speaker 4: have a one million car production, and I keep on

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Speaker 4: answering that I need one million customers. The point is

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Speaker 4: not about the production. The point is about the customers.

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Speaker 3: Now, it is.

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Speaker 4: Quite clear that if you have one million customers out

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Speaker 4: there and you have to break down the one million

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Speaker 4: customers among a certain number of car makers, If you

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Speaker 4: increase the number of carmakers competing for the same one

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Speaker 4: million customers. It is easy to understand that there will

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Speaker 4: be less cars to be produced, and that is going

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Speaker 4: to open the road to a new context. And in

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Speaker 4: the new context we'll see what other decisions we need

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Speaker 4: to make. But at the end of the day, it

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Speaker 4: all boils down to something we know very well in

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Speaker 4: the US.

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Speaker 3: Make the customer happy. Period.

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Speaker 4: It starts there good quality, good appeal, good affordability, and

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Speaker 4: then you will capture the share of the market that

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Speaker 4: you deserve. And if you don't compete with the harshest competition,

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Speaker 4: then forget it. On the long run, you are going

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Speaker 4: to disappear. There is no other way than to compete

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Speaker 4: with the harshest competition at any point in.

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Speaker 2: Time, Carlos, I can tell you this. I'd be very

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Speaker 2: happy if there was a mass AROUNDI on my drive. Okay,

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Speaker 2: we can leave it there, callus. Thank you, appreciate your time.

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Speaker 2: I can talk all day with you. Appreciate it. Calstavirusats

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Speaker 2: the scientist see