Stellantis is actively searching for a successor to CEO Carlos Tavares, whose contract expires in January 2026. The search comes amid significant challenges for the automotive giant, including a sharp decline in profits and criticism from U.S. dealers. Despite the ongoing hunt for a replacement, Tavares’ departure is not guaranteed, and his contract might still be renewed, depending on future developments.
Mounting Challenges and Financial Struggles
Stellantis, the world’s fourth-largest automaker formed from the 2021 merger of FCA and PSA, has been facing a turbulent year. In the first half of 2024, the company’s net profit plunged by 48%, driven by weaker demand and a 16% drop in U.S. sales. American dealers have been vocal in their dissatisfaction, blaming Tavares for what they describe as a “disaster” and the “rapid degradation” of the group’s American brands.
John Elkann, chairman of Stellantis and Ferrari, confirmed in an interview with Bloomberg that the search for a new CEO is underway. However, he did not rule out the possibility of renewing Tavares’ contract after it ends. While the company is preparing for a potential leadership change, sources close to the matter have indicated that Tavares is unlikely to be ousted before his term concludes.
Struggling Brands and Market Woes
Stellantis manages a diverse portfolio of 14 car brands, each promised investment through the end of the decade. However, Tavares has issued stark warnings, emphasizing that unprofitable brands could face closure. “If they don’t make money, we’ll shut them down. We cannot afford to have brands that do not make money,” Tavares stated recently, highlighting the ongoing pressure within the group.
Several Stellantis brands, including DS Automobiles, Lancia, and Chrysler, have been struggling, while Maserati’s deliveries dropped by more than 50% in the first half of 2024. Tavares has attributed Maserati’s poor performance to ineffective marketing strategies, stating, “If sales are sluggish right now, it is a matter of marketing… we need to reach potential customers and deliver the right message.”
Ram, one of Stellantis’ key brands in the U.S., is also facing quality concerns. Tavares pointed to issues at the Sterling Heights factory in Michigan, where many newly built Ram 1500 pickups require repairs immediately after production. Additionally, inventory shortages hampered Ram’s ability to sell more trucks in the first half of the year.
The Search for Tavares’ Successor
Finding a replacement for Tavares will not be easy, given the breadth of Stellantis’ operations and the complexity of managing so many brands. With about 15 months until Tavares’ contract expires, Stellantis is under pressure to identify a capable leader who can navigate the company through its current difficulties.
The cooling electric vehicle market has also presented challenges, prompting Stellantis to halt production of the Fiat 500e for four weeks. As Stellantis grapples with these issues, Tavares remains committed to driving improvements, but it remains uncertain whether his efforts will be enough to convince Stellantis’ leadership to keep him at the helm.
Looking Ahead: A Critical Juncture for Stellantis
Stellantis faces a critical period as it looks to stabilize its operations and regain market confidence. The hunt for a new CEO reflects a broader need for fresh leadership amid ongoing struggles and internal dissatisfaction. While Tavares’ future with the company remains uncertain, the decision will ultimately hinge on whether Stellantis believes he can turn the tide or if a new leader is needed to steer the company forward.
With 15 months to make a decision, all eyes will be on Stellantis as it navigates this pivotal moment, balancing the complexities of its extensive brand portfolio and the need for a strategic reset in the face of mounting challenges.
