The situation at Stellantis is far from smooth. The automotive giant's net profit for the first half of 2024 has taken a significant hit, dropping by 48% due to declining demand. U.S. dealers, where sales have fallen by 16%, are pointing fingers at CEO Carlos Tavares, labeling the situation a 'disaster' and the 'rapid degradation' of American brands. With Tavares' contract set to expire in January 2026, there's speculation it may not be renewed.
In a recent interview with Bloomberg, Stellantis chairman John Elkann confirmed that the search for a new CEO has begun. Elkann, who also chairs Ferrari, did not completely dismiss the possibility of extending Tavares' contract once the current five-year term ends. Tavares was appointed CEO when FCA and PSA merged in January 2021, forming the world's fourth-largest automaker. Despite the rumors, Bloomberg sources indicate that Tavares' position is not currently under immediate threat. A Stellantis spokesperson noted that initiating a search is 'normal' and that it may not necessarily influence future decisions, implying Tavares could remain beyond January 2026.
Stellantis oversees 14 car brands, all of which are expected to stay under its umbrella until at least the end of the decade. The company recently reaffirmed its commitment to the 2021 plan of investing in all brands for a decade. However, Tavares' recent comments about potentially shutting down unprofitable brands—'If they don't make money, we'll shut them down. We cannot afford to have brands that do not make money'—suggest a more critical stance. Brands like DS Automobiles, Lancia, and Chrysler are reportedly struggling, and even Maserati is facing challenges with a 50% drop in deliveries in the first half of the year. Tavares attributes this to ineffective marketing, emphasizing the need for better outreach and messaging.
Quality issues at Ram have also surfaced, with Tavares blaming the Sterling Heights factory in Michigan for producing too many defective 1500 pickups. Additionally, the cooling electric vehicle market has led Stellantis to suspend production of the 500e for four weeks. Despite the current electric-only status of the city car, a hybrid version with a gasoline engine is set to launch in 2026. Managing so many brands is a monumental task, and finding a suitable replacement for Tavares will be no easy feat. Stellantis has approximately 15 months to find a successor, unless Tavares can persuade the board to extend his tenure, which seems unlikely given the current circumstances.
