(Bloomberg) -- One of the auto industry’s leading dealmakers sees the stars aligning for carmaker mergers and acquisitions — and wants in on the action.

Stellantis NV’s Carlos Tavares views the ascendance of Chinese manufacturers, the European Union’s efforts to phase out combustion engines, and the United Auto Workers union’s costly new contracts as among the factors fueling greater potential for M&A.

In an exclusive interview Wednesday with Bloomberg News, the 65-year-old chief executive officer said antitrust authorities will have to take these circumstances into account when deciding whether to green-light another major deal like the 2021 merger of PSA Group and Fiat Chrysler.

Here are highlights from the conversation that have been edited and condensed for clarity and length.

Are you gearing up for M&A?

The other day, we were working on preparing the way we are going to present the results of the first leg of the Dare Forward 2030 plan. When we were preparing this, I asked the team, is there anything that has changed over the last three years compared to the moment where we built the plan?

The answer from the team was the magnitude of the Chinese offensive, which I think is true. The magnitude of the Chinese offensive, the competitiveness that they can demonstrate and the massive arrival of all of their best carmakers is a significant change.

What does this mean for you?

It means that when these contenders come to our markets with the ability to sell the EVs at the same price as internal combustion engine vehicles, and at the same time the western governments are imposing 100% battery-electric vehicle sales, it is quite obvious that the guys who cannot make cost-competitive BEVs are going to be in an existential problem.

The companies that did not prepare themselves for this impact are going to be, from my perspective, in trouble. Which means that we need to be fit and we need to be ready. If those opportunities were to materialize, then we want to be part of that consolidation. The guys who have not been doing their homework in cost reduction are the guys that are going to put themselves in trouble.

So you see a wave of consolidation coming in the automotive industry?

Consolidation will come, and it’ll put the western world in a difficult situation to decide what to do with antitrust. The current antitrust rules are counterproductive to face the Chinese offensive. At one point in time, if you have to fund a very expensive technology and you don’t have scale, you are going to put yourself in trouble.

Fortunately, thanks to the European Union, which I would like to thank here, we could create Stellantis and it is absolutely fair to say that we were supported by the European Union. Had we not done that, we would’ve been in deep trouble. FCA would be in trouble, and PSA would be in trouble. So that was the right move at the right timing.

Do you see Renault as vulnerable?

The lack of scale is always a problem. It is also a question of strategy.

I respect the courage of Renault to do something which is very different. And that’s one of the reasons why I am looking at what they are doing, because it’s refreshing and because I can learn from any of the good things they would be doing. It could be for me an inspiration for things we could do ourselves.

What they are doing in France is good, and I’m trying to face a very harsh competitor. It’s normal that I fight against a competitor. That’s what the European Union wants — harsh competition to the best benefit of the consumer. It’s normal that we are looking at a very efficient competitor in France and that we try to beef up our own activities to be able to face them.

It is quite clear that I think that this transformation will lead to a certain number of problems. More and more, you see Chinese partners or suppliers in the constellation of Renault.

We’ll see how this is going to unfold, including in the eyes of the French government. I have no specific interest in this company more than any other; I’m just observing that they have a different strategy. But I have all always showed respect, vis-à-vis the company.

I was surprised by their Old Co.-New Co. strategy. And as you know, my thinking is exactly the opposite. We need one single team putting the company in one single direction with the full scale and the full power. Because what is going to fund the electrification is the profitability of ICEs. So if you cut what is profitable, and you isolate what is not profitable, how can you fund what is not profitable in the world where the interest rates are high?

What about General Motors and Ford?

I don’t know; it depends on what the situation will be. There is one thing that I believe is a precondition for everything, is that it represents a win-win. And it’s done in a friendly manner, which means a convergent manner.

If the automotive industry doesn’t move, this industry will disappear under the offensive of the Chinese industry.

I’m just trying to figure out first how I make my company successful. And secondly, if that is the case, what are the opportunities that will appear? If I don’t have financial soundness, then it’s not possible. The second one is, to make sure that whatever we do, if we were to do something, we do it in an amicable way. For me, that’s fundamental. We are not going to make hostile things.

Why? Because it is already difficult. When you make friendly things, as we did with Stellantis, it’s already difficult to face the criticism of all the naysayers.

So if two companies were to come together, they need to be sincerely convinced that the synergies that would come out of that process would create value for all the stakeholders.

What does Jeep need to do to turn its fortunes around?

We have two excellent top executives that are leading the two engines of the North American business. Most of it is about Ram and Jeep, with Tim Kuniskis and Antonio Filosa.

We have now a new regional COO with a very demanding executive that did an excellent job in Mexico.

So with Carlos Zarlenga, Antonio Filosa and Tim Kuniskis, we have three excellent executives who are going to work together to pull North America back to a better position.

We need to deal with the consequences of the UAW strike. That has a huge impact on the profitability of the US.

We need to continue to work the quality and the cost, but I think they just need a more dynamic management to be in a much better position.

For the product plan and pipeline, they have everything they need. The Jeep Recon, the Jeep Wagoneer — all of these are fantastic products that will certainly give a boost of confidence to the Jeep teams.

--With assistance from Gabrielle Coppola.

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