The resignation of Carlos Tavares and the current context
The world of the automotive industry is in turmoil after the announcement of the resignation of Carlos Tavares, CEO of Stellantis, who will leave office on December 1, 2024. This decision, accepted by the Board of Directors chaired by John Elkann, has raised concerns among investors, as the group’s shares have hit their lowest since 2022. The merger between Fiat Chrysler Automobiles and the PSA Group, which took place in 2021, gave birth to Stellantis with great expectations, but now the company’s future seems uncertain
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The causes of the decline under the Tavares administration
Filippo Diodovich, Senior Market Strategist at IG Italia, analyzed the reasons that led to this situation. According to Diodovich, Tavares’ strategic choices, especially in the United States, were decisive. The management of historic brands such as Jeep, Dodge and Ram has shown signs of ineffectiveness, with a decline in appeal and an inadequate response to market needs. In addition, Stellantis has struggled to keep up with competitors in electrifying its range, a crucial aspect in a rapidly evolving sector
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Future prospects and possible mergers
With the US market in crisis, with deliveries down 36% and revenues down 42%, the new CEO will have the daunting task of repositioning Stellantis. Diodovich suggests that a merger could be a viable path to ensure the group’s survival. Among the European partners, Renault emerges as the most compatible, despite the complexities associated with the transaction and the possible sales of brands to comply with antitrust regulations.
History teaches that mergers can lead to the creation of giants, as demonstrated in the aerospace sector with the birth of Airbus.
The challenges of the new CEO
The new leader of Stellantis will face significant challenges, including the need to renew electrification strategies and manage relations with unions. Demand for cars remains weak and the European automotive sector is consolidating. The ability to adapt to these dynamics will be crucial for the future of Stellantis. The choice of the new CEO and his strategies will be decisive for the relaunch of the company and for maintaining competitiveness in the global market
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