Stellantis, the parent company of Chrysler, Jeep, Fiat, and Peugeot, announced the resignation of CEO Carlos Tavares due to differences with the board and disappointing sales figures. Tavares, a key figure in the merger that formed Stellantis, faced criticism for high vehicle prices and declining sales.
The departure of Tavares followed a significant drop in Stellantis' sales, leading to unsold inventory, plant layoffs, and calls for his removal from various stakeholders. The company's global sales volume fell by 10% in the first half of the year and plunged by 20% in the third quarter, with US sales down 17% over nine months.
One of the key issues highlighted was the high average price of Stellantis vehicles in North America, which deterred traditional customers. The company's slow response to market demands and layoffs at its production facilities further strained its relationship with the United Auto Workers union.
Despite strong profits in 2023, Tavares' compensation of €36.5 million drew criticism, with accusations of prioritizing profit margins over competitive pricing and production efficiency. Stellantis faced challenges in meeting its profit forecast for 2024, prompting a reassessment of its strategic direction.
The company is now in the process of appointing a new CEO to lead Stellantis through its current challenges. The resignation of Tavares marks a significant development in the company's efforts to address its sales decline and restore confidence among stakeholders.
Stellantis' decision to replace Tavares reflects a strategic shift in response to market pressures and internal dissent. The company's future performance will be closely monitored as it navigates a competitive automotive landscape and works to regain its market position.
