Stellantis has reportedly started the process of finding a successor for its current CEO, Carlos Tavares, whose term is set to expire in 2026.
They say that this strategic move, first reported by Bloomberg, is part of standard corporate procedures to ensure a smooth and well-planned leadership transition. Tavares, who has been leading Stellantis since its inception in 2021, will play an active role in selecting his successor, ensuring continuity in the company’s long-term vision.
The decision to seek a new leader does not necessarily imply that Tavares will leave his position in 2026. Rather, it reflects Stellantis’ proactive approach to exploring all available options to maintain its competitive edge. The company has emphasized that it is normal for a board to address the expiration of a five-year contract well in advance and has recognized Tavares’ pivotal role in the post-merger success of Stellantis. But there is more.
All Carlos Tavares mistakes
2024 has proven to be a difficult year for major car manufacturers, and Stellantis is no exception. Despite a strong performance in recent years, Stellantis’ profits have plummeted by 48% compared to 2023, marking a substantial downturn for the company. While a sluggish European automotive market plays a part, the root of Stellantis’ woes stems from the other side of the Atlantic — its underperformance in the U.S. market.
Carlos Tavares has admitted that the company’s approach in the U.S. has been flawed. With the exception of Jeep, brands like Dodge, RAM, and Chrysler have been neglected, failing to receive the same attention as their European counterparts. Dodge and Chrysler, in particular, await much-needed revivals, while RAM struggles to maintain its foothold. This misstep has been costly, contributing to Stellantis’ weakened position in the world’s second-largest automotive market.
Managing a company of Stellantis’ size is no easy feat. Formed in 2021 through the merger of France’s PSA and Fiat Chrysler Automobiles (FCA), Stellantis now holds the record, alongside Geely, for the highest number of automotive brands under one roof.
Unlike Geely, which has intentionally created many of its brands (and they are struggling as well), Stellantis inherited a sprawling, and at times, overlapping portfolio of marques — many of which were already struggling. Tavares initially gave each brand a ten-year window to prove its viability, a strategy that is now being tested amid mounting competition and market volatility.
The competition heats up
Stellantis’ problems are compounded by the aggressive entry of Chinese automakers into the European market. Offering advanced technology at more competitive prices, Chinese manufacturers are quickly capturing market share, further intensifying Stellantis’ struggles, particularly in the electric vehicle sector.
In the early days of the EV boom, Stellantis saw success with models like the Peugeot e-208 and the Fiat 500 electric, both of which ranked among the top 10 best-selling EVs in key European markets. However, as new competitors have emerged with better value propositions, Stellantis’ early gains have eroded.
Adding to the company’s woes is an outdated electric vehicle platform. Stellantis’ CMP platform, co-developed with Dongfeng in the 2010s, is no longer competitive, with range capabilities falling short of the 400 km mark. However, the company is hopeful that its newer STLA platform, in its various iterations (Small, Medium, and Large), will provide the foundation for a more efficient and modern EV lineup.
Jeep tries to shine while other brands struggle
Among Stellantis’ many brands, Jeep remains a relative bright spot. Despite a challenging year in 2024, Jeep’s diverse lineup, which spans rugged off-road vehicles like the Wrangler to more refined models like the Grand Cherokee, has allowed it to remain competitive. Jeep accounted for 17% of Stellantis’ sales in 2023, with strong performances in Europe, Brazil, and the Middle East.
Surprisingly, Fiat has also shown promise, particularly in the U.S., where sales have surged by 67%, despite its limited model offering. However, Fiat’s growth has been hampered by missteps, including the premature introduction of an all-electric Fiat 500 at a time when the market wasn’t quite ready for such a shift. The company is now working on a hybrid version of the 500, which will replace the aging 2007 model, and the new Fiat 600, a mild-hybrid SUV that has bolstered the brand’s lineup.
Meanwhile, brands like Citroën and Peugeot have maintained a steady course. Citroën’s focus on affordability and comfort, combined with Peugeot’s bold design approach, have kept them in the game, while Alfa Romeo has slowly but surely regained its footing, delivering some of its strongest performances in recent years.
Maserati’s troubles
One of the most significant sources of concern for Stellantis in 2024 has been Maserati. Sales of the luxury brand have faltered, with global deliveries dropping below 1,100 units per month in the first half of the year, resulting in an operating loss of €82 million. Carlos Tavares’ public comments, suggesting that brands failing to generate profit could be shuttered, only added fuel to speculation about Maserati’s future.
While Tavares later walked back those remarks, acknowledging Maserati’s potential, the brand still faces an uphill battle. With only the Grecale appealing to a broader audience, Maserati’s lineup is limited to niche sports cars like the GranTurismo, GranCabrio, and MC20. The discontinuation of the Quattroporte, Ghibli, and Levante has further diminished its global presence.
Nevertheless, Maserati’s global recognition and association with Italian craftsmanship and design give it a strong foundation. If Stellantis can develop a dedicated strategy, Maserati has the potential to become a serious competitor to Porsche.
The American collapse
Perhaps the most alarming issue for Stellantis in 2024 has been its steep decline in the U.S. market. Sales of Jeep fell by 9% in the first half of the year, with RAM plummeting by 26%. Dodge and Chrysler didn’t fare much better, with drops of 16% and 8%, respectively. In a letter published on September 10, the National Dealer Council expressed deep concern about Tavares’ leadership, accusing him of neglecting the U.S. brands and overseeing a rapid decline.
While Fiat saw a 67% boost in U.S. sales, the actual number of cars sold remained low, with only 316 units sold by mid-year. Alfa Romeo, on the other hand, managed a modest 2% increase.
In response, Stellantis issued a statement defending Tavares and criticizing the personal attacks leveled against him. The company reiterated its commitment to turning things around in both Europe and the U.S. and has announced a $406 million investment plan to upgrade three plants in Michigan to focus on electric vehicles and internal combustion models.
Looking Ahead
Despite the challenges, Stellantis remains optimistic about its future. The company has assured that none of its 14 brands will be shuttered before the ten-year deadline, with ongoing investment into key models like the Fiat 500 hybrid and new electric vehicles for both Europe and the U.S. If Stellantis can deliver on its promises, the company could still recover from its current slump and maintain its position as a global automotive leader.
The coming months will reveal whether the company’s leadership and strategic investments are enough to overcome the formidable obstacles it faces in 2024.
