Stellantis CEO Carlos Tavares has unexpectedly stepped down, effective immediately, amid mounting challenges in the US market and declining global sales.
The automaker, which emerged from a 2021 merger between Fiat Chrysler Automobiles and PSA Groupe, cited “different views” between Tavares and the board as the primary reason for his departure.
Leadership Transition
Chairman John Elkann will lead a newly established interim executive committee until a new CEO is appointed.
Stellantis expects to conclude its search for Tavares’ successor in the first half of 2025.
Henri de Castries, Stellantis’ senior independent director, said:
“Stellantis’ success since its creation has been rooted in a perfect alignment between the reference shareholders, the Board and the CEO. However, in recent weeks different views have emerged which have resulted in the Board and the CEO coming to today’s decision,”
Declining Financial Performance
The resignation follows a year of disappointing financial results for Stellantis:
In September, Stellantis reduced its annual performance targets, citing challenges in the US market.
Third-quarter net revenues dropped by 27 percent year-over-year.
Global vehicle sales fell by 20 percent during the third quarter, with continued declines in the critical US market.
US-traded shares of Stellantis have plummeted by 43 percent in 2024.
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Challenges in the US Market
Tavares faced significant issues managing Stellantis’ US. operations, historically a key driver of the company’s profitability. Key factors include:
A lack of investment in new or updated products and reliance on historically high vehicle prices.
Aggressive cost-cutting efforts, including relocating operations to lower-cost countries such as Brazil and Mexico, have drawn criticism from employees, unions, and dealers.
The United Auto Workers union has repeatedly criticized Tavares for layoffs and production cuts, which have fueled unrest among US plant workers.
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Tavares’ Legacy
Carlos Tavares, who previously led PSA Groupe and played a pivotal role in the creation of Stellantis, initially earned praise for:
Successfully steering the merger that created the world’s fourth-largest automaker.
Achieving significant cost savings, including a reported €8.4 billion ($9 billion) reduction since the merger.
However, his leadership has come under scrutiny in recent years:
While touted as necessary, the cuts were described by insiders as excessive and damaging to the US market.
US dealerships have voiced frustration over bloated inventories and limited financial support for vehicle sales.
Job cuts affecting thousands of workers in the US and Italy have led to strained relationships with labor unions.
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Looking Ahead
Stellantis now faces the dual challenge of stabilizing its US market performance and finding a leader capable of navigating its global operations amid fierce competition and evolving industry dynamics.
The company has stated that its CEO search is well underway and aims to conclude by mid-2025.
Industry Context
Tavares’ resignation highlights the pressures automakers face as they adapt to a rapidly changing landscape driven by electrification and shifting consumer preferenceStellantis must address these challenges to regain its footing, particularly in the US which remains a critical market for long-term growth.
As the automaker navigates this pivotal transition, the next leader’s ability to align stakeholders and address systemic issues will be critical to shaping Stellantis’ future trajectory.
