Stellantis under Pressure: Carlos Tavares Struggles for Investors' Trust

Carlos Tavares, the CEO of Stellantis, is drawing attention at the Paris Motor Show with a packed schedule of public appearances. Following the recent profit warning at the end of September and the announcement of his resignation when his contract expires in 2026, Tavares is now under pressure. Investors are unsettled, as Stellantis' stock has fallen by almost 45% this year. The CEO of the world's fourth-largest automobile manufacturer initially described the issues in the US as a "small operational error." However, the shares came under renewed pressure as further details emerged about his planned departure and an impending management realignment. Although he enjoyed a stellar reputation in the past, Tavares is now in an unaccustomed defensive position. With five planned appearances at the same event, Tavares is as present as his Renault colleague Luca de Meo and significantly more so than other executives, including those from industry giants such as BMW and Volkswagen. Tavares must demonstrate how he can reverse Stellantis’ declining profits in the remaining 18 months of his tenure, especially given the competition from China and rising costs. A significant portion of the challenges results from price adjustments that have overstretched the American market. Dealers complain that Stellantis has neglected once-popular models and that current sales figures have plummeted. The automotive industry in the US relies on the unique brand diversity of Jeep, Dodge, Ram, and Chrysler to endure even in difficult times. Nevertheless, Tavares and Stellantis face fundamental decisions regarding the direction of their brands in North America.