WEBVTT

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Xavier, thank you so much for
being here with us today.

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Talk about the cost pressures
facing automakers.

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Well, I think there's different
sources of that pressure.

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The first one very simply is the
price of cars

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have gotten very high and now,
you know, lots of people can't

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even afford a new car.

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It's interesting to see the
number of geographies, the

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average age of a car buyer is
above 55 years old.

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That says a little bit on the
affordability.

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And so we need to reduce the
cost of the cars in general. But

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also now we are facing new
competition, notably from the

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Chinese OEMs, who tend to be
roughly 30% cheaper than our

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Western manufacturers, both in
the US and in Europe.

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And if I take those 30%, you
know, I said 15% is local

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factors and maybe I would call
incentives or subsidies from the

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administration, but 15% is real
cost difference, and we need to

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take it out to be competitive.

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So what can leaders do to close
the gap on cost?

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Quite a few things that, you
know, if I look for instance at

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the Chinese OEMs as a benchmark
that actually they they started

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to do before us.

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One thing is R&D cost. They
tend to be much faster in the

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development of a new car.

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And we know that time is money.

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So every time you reduce the
time it takes to develop a car,

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you know, we reduce the cost of
the development and the R&D.

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So that's the number one.

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But second, they've actually
innovated in the way they build cars.

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They have, you know, bigger die
casting, for instance.

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It's a big term just to explain
that instead of taking, you

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know, several pieces and putting
them together, they're actually

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casting a bigger piece.

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And that in itself, you know,
reduces the cost of the car.

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Then I think, you know, if I
look at, some of the Western

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OEMs, they tend to dictate to
the suppliers what they want.

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I think in a way Chinese
suppliers trust the Chinese

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OEMs, trust their
suppliers better.

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And they ask them to propose,
you know, innovation, new ways

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to build things, to optimize
the cost.

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And in that way, you know, I
think they get in the end

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cheaper purchases.

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Thank you so much.