Stellantis CEO Carlos Tavares faces pressure at Paris Auto Show amid US crisis

Stellantis CEO Carlos Tavares sought to defend the group’s turnaround strategies on Monday, the day after informing investors that it has missed its target and rattled markets. The September 30th announcement came as a surprise to some stakeholders who have been used to the automaker’s high margins from US pickup truck and Jeep sales and saw stock of Stellantis drop almost 45 per cent this year.

To begin with, Tavares dismissed the problems with the US market as 'small operational error.' Yet the stock slumped further after it was announced that his break is coming at the end of 2026, and amid a major management reshuffle that has left investors jittery. “The reason was personal, I didn’t ask for an extension,” Tavares told reporters, before adding: “I’m the guy heading the company so I will take the hits.”

Stellantis’ lack of struggles in the US went to the CEO who blamed a “risky” marketing plan rolled out in the second quarter by regional managers apologising: “I could have stopped it.” And it didn’t work, I didn’t.” The remarks reflect a dramatic turnabout for Tavares, who had previously been famous for being a successful leader after the Peugeot and Fiat Chrysler merger.

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Tavares came under increasing pressure from a rapidly rising dearth of Stellantis' cheaper Chinese rivals and soaring costs as his remaining 18 months saw the car makers' future in jeopardy. If customer preference requires, he said job cuts, plant closures or brand divestiture could be needed to ensure profitability.

US issues, mostly ones due to excessive inventories, will be dealt with 'before Christmas, 2024,' Tavares said, 'I am sure.' Analysts have highlighted missteps in operations, including firms turning off price discounts too slowly to compensate, resulting in thousands of vehicles left unsold on dealerships, and price increases that alienated customers.

While they have expressed concerns about Stellantis' strategy, they have criticised the company’s focus on neglecting entry level vehicles and a lack of investment in popular models. It’s no wonder Tavares could also find himself clashing with the United Auto Workers (UAW) union, which has warned of strikes over delayed investments, making the road forward for Stellantis even more challenging.