Stellantis CEO Departs Amid Slumping Sales and Board Disagreements
In This Article:
The Jeep maker Stellantis (NYSE:STLA), the fourth largest automaker in the world is heading to a leadership crisis after the CEO Carlos Tavares left the office on Sunday with immediate effect. Tavares cited different views' issues he had with the board of directors that made him quit. Tavares' departure coincides as the company is struggling with sales slump, rising inventories in the U.S., and downbeat annual expectations.
The head-hunting process for a new CEO has already begun and should be completed by the first half of the next year. Until the new CEO appointed, the company will be run by the interim executive committee with John Elkann leads. This group will therefore direct Stellantis navigating the current challenges.
Previously Tavares had implemented cost-cutting measures such as reducing headcount by 15.5% and relocating to lower-cost countries. The measures invited voices from the United Auto Workers union and dealership network opposing the management under Tavares, Stellantis' layoffs and production cut.
Stellantis' last quarter lead to less favorable results: net revenues and the number of vehicles sold worldwide drop substantially and therefore Stellantis lowered its annual guidance targets. And this drop in sales is not new.
Stellantis having its sales in general downward trend, in the last five quarters Stellantis' sales fluctuated in numbers from $54 billion in June 2023 to only $49 billion in June 2024.
Stellantis is now struggling to keep up with the schedule of introducing new product to the market. As o fresh products, the delays or gap' in launching makes it harder for the automaker to attract and retain customer and leading to sales decline.
The changing market is also a problem to be creatively navigated as demand from China for Western luxury cars depleted as they complaint about Stellantis' cars that historically always set in high prices with fewaffordable choices. And that's all the problems that the interim executive committee should face before the new head found.
Find out more about Stellantis' performance with charts and guru insights now in GuruFocus!
This article first appeared on GuruFocus.