Shortages of semiconductors and other components are easing, Stellantis CEO Carlos Tavares said, helping the industry increase production and bulk up inventories.
The constraints on production are being lifted just as automakers contemplate the prospect of price wars and a more competitive industry.
Consumers may be less willing to spend on big-ticket items such as cars because of worries about inflation, rising interest rates and higher energy prices.
"The situation continues to improve,” he told journalists on Wednesday about the semiconductor supply. "Over the last six months we have been able to hold a very significant level of production.”
Tavares said there has already been a noticeable easing of demand, but that Stellantis can avoid cutting prices in the short term because it still has months’ worth of orders to deliver. He said Stellantis had 1.3 million cars in its global inventory, including 1 million in dealer stock.
"We have clear signs that there is a rebalancing of supply and demand so it’s normal that pricing power will be under pressure for the next few quarters,” he said. "The good news is that supply is back so we will have a greater overall potential for profitable volume” as orders are filled and if demand level remains the same.