Stellantis Group is considering replacing its CEO. Although officials say this is normal succession planning, succession of the current CEO, Carlos Tavares, whose contract expires in 2026, is becoming uncertain. In this year, the company has suffered financially so far, particularly in the profitable North American market, where it has suffered heavy losses.
Last year, Stellantis outperformed many of its competitors in terms of profitability, but its net profit fell sharply in the first half of this year, sales in the US market declined and the share price took a hit. So dealers, shareholders and unions have expressed dissatisfaction with Carlos Tavares' policies, leading to a shake-up in his position. Stellantis chairman John Elkann is unhappy with the performance of the North American market, with executives already leaving, and the heir apparent to the Chrysler family has criticised Carlos Tavares.
To meet the challenge, Stellantis plans to cut costs and delay site start-ups, but is opposed by the United Auto Workers union. And there is discontent over Carlos Tavares's pay increase. The company's financial situation changed dramatically, with net profit falling 48 per cent year-on-year in the first half of 2024, despite high profits in 2023.
In the Chinese market, shipments from Stellantis' joint ventures have fallen sharply.Carlos Tavares has put forward plans to optimise the brand portfolio, including the possible sale or closure of some underperforming brands. While rumours of brand sales have been denied, the company is indeed making cuts.
Carlos Tavares has successfully built Stellantis into one of the most profitable car companies in the world, but he is currently facing challenges in the North American market. A former race car driver, he became president of PSA in 2014 and drove the merger between PSA and FCA in 2021. While Stellantis had bucked the trend in global results, it has underperformed in China.
Stellantis reiterated its financial targets for 2024 and reported an increase in sales and a rise in market share in August. The company plans to continue cutting inventory and plans to evaluate strategies to turn around its North American business at its October board meeting.
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