Stellantis’ announcement Thursday that CEO Carlos Tavares would retire at the expiration of his contract, in early 2026, failed to inspire optimism among shareholders. The company continued a downward trend which has seen its stock fall 45% in the past year.
The company announced that it would name his successor in the fourth quarter 2025.
The share price of the struggling Netherlands-headquartered auto major was trading lower by more than 3.8% at 12:18 pm, GMT+2.
Shareholders are concerned about the future of Stellantis, especially as it faces significant challenges in North America.
An announcement fails to address the core concerns behind a company’s struggles
Analysts say that while the retirement announcement is important for the company’s transition in leadership, it has not addressed the core concerns driving Stellantis current struggles.
Stellantis’ stock has fallen due to the automaker’s poor performance in North America.
Jeep and Ram have seen their sales plummet, and the pricing strategies of the company have not resonated well with consumers.
High dealer inventories have led to a decline in earnings, and a lower profit forecast for 2024.
Tom Narayan, an analyst at RBC, expressed doubts about whether recent changes in senior management could help the company overcome its North American problems. He said:
It is unclear how the new management will reverse the trends in Stellantis’ problems, which are rooted in aggressive pricing and high dealer inventories in North America.
His remarks reflect a broader insecurity about the effectiveness of the leadership shake-up at the company.
What are the changes in leadership?
In a late-night statement, the group said:
Stellantis announced today that it would make targeted management changes to improve organisational performance and simplify the company in a turbulent world. These changes will be effective immediately.
Doug Ostermann, former chief operating office of Stellantis China division, replaces Natalie Knight as finance director, while Antonio Filosa succeeds Carlos Zarlenga as North America chief operational officer.
Jean-Philippe Imparato will replace Uwe Hochgeschurtz as the head of European operations.
Despite these changes many investors are still unsure that the restructuring will stop the downward spiral of the company.
Analysts at Bernstein highlighted Stellantis’ lack of credibility among investors, especially after the automaker dismissed investor concerns about its US inventories for months before cutting its guidance in late Sept.
The company said in September that it expected a margin of adjusted operating income between 5.5% and 7.0 percent%. This was not the double-digit increase it had anticipated.
The management reshuffle today is the latest in a long list of senior management changes that has seen 21 in the past 12 months. It will not calm investor’s nerves.
Analysts are divided about the future of Stellantis, a company whose stock is falling and whose North American operations continue to struggle.
Analysts at JPMorgan were a bit more optimistic. They saw the changes in leadership as a sign that there was refocus.
They think the company’s decision that it will identify a successor to Tavares before the fourth quarter 2025 gives them some long-term certainty.
The company’s future is still uncertain.
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