Carlos Tavares’ busy schedule at the Paris auto show Monday indicates the Stellantis CEO will struggle after a massive profit warning in late September, even after announcing his retirement date.
The Sept. 30 warning from the world’s fourth-largest automaker shocked investors accustomed to high margins fueled by lucrative sales of pickup trucks and Jeeps in the United States. Stellantis shares have lost nearly 45% since the start of the year.
At first, Mr Tavares described the problems encountered in the United States as a “small operational error”. But Stellantis shares resumed their slide on Friday as news of his departure when his contract expired in 2026 and a major management shakeup failed to placate investors.
Previously seen as almost invincible after relaunching Peugeot maker PSA and overseeing its merger with Fiat Chrysler to create Stellantis, Mr Tavares finds himself in uncharted territory as he begins a media campaign starting Monday.
Aged 66, he is scheduled to speak at five events, as many as Luca de Meo, CEO of Renault, but more than the leaders of BMW and many other car manufacturers. Oliver Blume, the boss of Volkswagen, will not attend the show at all.
Mr. Tavares will be under pressure to explain how he plans to revive Stellantis in his remaining 18 months at the helm, amid increased competition from cheaper Chinese rivals, weak demand and increased costs.
Analyst data and interviews with industry players show that Stellantis made major operational mistakes in the United States, raising prices beyond customer budgets and then reacting too slowly to discount models, leaving tens of thousands of cars stuck on dealership lots.
“They’ve tried for too long to hold firm on pricing,” said Erin Keating, an analyst at Cox Automotive, whose data shows inventory problems across the board at Stellantis.
“When the United States is your cash cow, it seems negligent to ignore it.
Dealers complain that in addition to charging too high prices, Stellantis has scrapped entry-level vehicles and not invested enough in popular cars, while its rivals, including Ford and General Motors, modernized theirs.
Ford, in particular, has been eating into the Jeep market with its Bronco SUV.
In a September 10 letter to Mr. Tavares, Stellantis National Dealer Council Chairman Kevin Farrish complained that the pursuit of short-term profits had led to a “rapid deterioration” of the Jeep, Dodge, Ram and Chrysler, adding: “You created this problem.”
David Kelleher, president of David Auto Group, which has a Chrysler-Dodge-Jeep-Ram store outside Philadelphia, said that when Stellantis was founded in 2021, it sold an average of 165 new cars per month. This year, that figure fell to 89.
“We need a CEO who understands the North American market,” Mr. Kelleher said.
Mr. Tavares faces tough choices and a possible battle with the United Auto Workers (UAW) union to resolve Stellantis’ problems. The UAW threatened to go on strike over investment delays, leading Stellantis to file lawsuits accusing the union of breach of contract.
Experts say that in the long term, Stellantis needs to determine whether it needs four separate U.S. brands.
“EXCLUDED FROM THE MARKET
In recessions dating back to the early 1980s, when Lee Iacocca turned around Chrysler, the company that is now Stellantis was often the first of Detroit’s Big Three to suffer, with cheaper products and fewer customers. more price sensitive.
Today, Stellantis’ problem is different.
Like its rivals, Stellantis raised prices during the pandemic, when problems in the supply chain led to a shortage of new cars. But then she refused to lower them.
Pat Ryan, CEO of car-buying app CoPilot, said Stellantis increased prices by 50% between 2019 and 2024, while inflation increased by 23%.
“Stellantis has really priced itself out of its historical market,” Mr. Ryan said.
Data provided to Reuters by CoPilot shows 131 days of supply on dealer lots for Ram 1500 pickup trucks, 41 days more than its closest rival, the Chevrolet Silverado. The Jeep Wagoneer’s offer is 137 days, which is 22 days longer than its closest competitor, the Ford Expedition. Other models show similar or even greater differences.
“Everyone has inventory problems, but they are nowhere near as chronic or dramatic as at Stellantis,” Mr. Ryan said.
As a result of its slow response, Stellantis has left a larger proportion of 2023 year cars – which require deeper discounts to sell – than most of its rivals on dealer lots, even as models from the year 2025 are arriving.
Cox Automotive data provided to Reuters shows that as of early October, Stellantis’ 2023 models still accounted for 19.3% of Dodge cars, 8.3% of Chrysler vehicles, 2.3% of Ram trucks and 1.3% of Jeeps on dealer lots. As for the 2025 models, they already represent 36.6% of Ram’s stock and between 11% and 14.5% for other brands.
Stellantis reported a 20% drop in U.S. sales in the third quarter, despite “aggressive” incentives across its entire U.S. portfolio.
According to Cox data, incentives for Jeeps, as a percentage of average transaction price, increased from 5.3% in May to 9% in September, and from 6.3% to 9.6% for pickup trucks. Ram.
CoPilot data shows Stellantis is offering $4,500 cash back on a Ram 1500 pickup, Mr. Ryan said, but Stellantis may need to double the discounts to reduce inventory.
It could also reduce its production.
“They (Stellantis) just have to produce less … for a few months for dealer inventories to replenish,” said Brian Sponheimer, an analyst at Gabelli Funds, a Stellantis investor.
Beyond the immediate crisis, experts say Jeep and Ram – and especially Dodge and Chrysler – have few vehicles, but each has separate and expensive teams for marketing, branding and design.
“Stellantis has important work to do on the brand in the United States,” Cox’s Mr. Keating said. “And it’s going to be painful.
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