Stellantis Eyes Leadership Change as US Sales Decline
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Stellantis NV Chairman John Elkann has started a search for a successor to CEO Carlos Tavares, whose contract runs out in early 2026.
The automaker confirmed the decision in response to questions from Bloomberg News, adding it’s part of regular succession planning. Pressure on the CEO is mounting due to Stellantis’ poor performance in markets including the U.S., its largest single profit center.
Elkann has no immediate plans for a leadership change, and Tavares will be included in the search process, according to people familiar with the matter. However, the chairman is increasingly dissatisfied with the situation in North America, where sales have been slowing and several executives have left the company, said the people, who asked not to be identified discussing internal matters. Elkann is also CEO of Exor NV, Stellantis’ largest shareholder.
Tavares, 66, has pursued a stringent cost-cutting strategy as Stellantis faces weakening demand for electric cars and intensifying competition from Chinese manufacturers. In the U.S., the Jeep and Chrysler maker is struggling with high inventory levels, quality issues and declining market share. The company’s stock has fallen more than a third this year.
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It’s “normal” for the board to start looking into succession planning given the CEO position’s importance, “without this having an impact on future discussions,” as there still is the possibility of Tavares staying on longer, a Stellantis spokesperson said. A spokesperson for Exor declined to comment.
Earlier this month, leaders of Stellantis’ U.S. dealer network criticized Tavares for overseeing a “rapid degradation” of the manufacturer’s brands, which also include Ram and Dodge. They urged him to spend more money to clear old inventory from their lots. The company also faces the possibility of additional strikes in the U.S. and Italy in coming weeks.
Fixing the U.S. issues will be a “top priority” for Stellantis until the end of this year, Chief Financial Officer Natalie Knight said Sept. 23, adding that the company is working hard to find solutions that satisfy all stakeholders, including dealers. Stellantis recently pledged to invest more than $406 million in three Michigan sites.
However, Tavares has been demanding additional budget cuts to protect profitability, stoking concerns that his aggressive efficiency push may ultimately endanger longer-term projects and revenue flows, the people said.
RELATED: UAW to Hold Strike Authorization Votes Against Stellantis
The CEO has been cutting jobs and reducing capacity at American factories since a plunge in U.S. sales nearly halved first-half earnings. He’s selling more assets and has floated the possibility of shedding one or more of the group’s 14 brands to protect profits.
Stellantis’ board of directors is scheduled to meet in the U.S. on Oct. 9 and 10 to evaluate plans for turning around the business in the region, the people said.
The CEO earned praise for his efficiency drive in the years following the 2021 merger of Fiat Chrysler and France’s PSA Group, as it made the company leaner and bolstered returns. In the months following the pandemic, Stellantis benefited from pent-up demand and high vehicle prices, with shares peaking six months ago. In July, the automaker reported a 48% drop in first-half net income.
“The economic prospects of the automotive sector require that investments be reviewed with the objective of focusing on those that represent a maximum contribution to customer satisfaction, to the performance of the company without any compromise on compliance with regulations, in particular CO2,” the Stellantis spokesperson said.
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