Stellantis CEO says US oversupply of vehicles will be fixed by Christmas

Stellantis CEO Carlos Tavares on Monday in France addressed the automaker’s recent leadership shake-up and what he expects from his new team.

What the “previous people” could not achieve was visible in the lack of results, said Tavares, who has been facing increasing pressure to improve the company's fortunes.

“What I expect is that the new leadership team is going to be stronger in getting the profit, the share, the customer satisfaction,” he said.

Last week, Stellantis named the head of Jeep, Antonio Filosa, as the new chief operating officer for North America, and Doug Ostermann, Stellantis China's chief operating officer, as chief financial officer for the whole company. The automaker’s struggles have been mounting this year, particularly in the crucial U.S. market, with down sales in recent quarters , high inventory levels, battles with the UAW and U.S. dealers, who have blasted Tavares for the direction of the company, and lowered financial guidance.

Tavares spoke during a roundtable event with journalists during the Paris Motor Show, where the automaker, which owns Jeep, Ram, Chrysler, Dodge and Fiat, is “spotlighting” its Citroen, Peugeot and Alfa Romeo brands, and the company’s joint venture partner, Leapmotor of China, is showing several of its electric vehicles.

Tavares also provided his clearest comments yet on the inventory issues.

“In the U.S., we were stumbling on the poor Q2 2024 marketing plan that created an inventory issue with the dealers, and now we are fixing that, and we are fixing it at the right pace. As we have already reduced inventory by 52,000 vehicles over the last three months and we want to be below 330,000 vehicles in dealer inventories by Christmas,” he said, noting that the automaker is on a “good track” toward a fresh start next year.

Tavares, who noted that the company’s regions have “a lot of autonomy,” said “the marketing plan that failed in Q2 was proposed and decided by the region.”

To be fair, he said, he’d seen that it was risky and that he could have stopped it but did not.

Tavares has previously spoken of “arrogance” without providing specifics.

The results, however, have left dealers in what one described as a “crisis mode” and another explaining how he has had to close two of his Stellantis dealerships and offer “heavy, heavy discounts” to deal with a large excess supply of Stellantis vehicles.

Tavares, whose contract expires in 2026, is set to retire, a recently announced development, and was asked about the search for his successor. He noted that he will be 68 and will have put in 45 years in the automotive world when he retires. Tavares said he had made the decision not to seek an additional term after speaking with his family.

Tavares said that as the CEO and a member of the company’s board he would be part of the discussion and would have to make a recommendation. He declined, however, to discuss the profile of the person in order to avoid speculation.

Tavares, who hails from Portugal, also provided a personal example Monday as he spoke about the need for automakers to do their part to address climate change.

“The other day my youngest daughter was driving her car in a forest in Portugal, and the forest caught fire, and she had to drive through the forest on fire. The door panel on the right-hand side melted,” he said, describing the need for Stellantis to be on the “right side of history” and contribute to “fixing the global warming issue.”

“So how do you feel if one of your daughters is in this position, and you say, ‘I’m going to ask to postpone the CO2 regulations?’ There is a moment where you need to face reality,” he said.

The comments follow outreach to the European Union by Stellantis’ European dealers to delay tough emissions targets set to take effect next year, according to reporting from Automotive News Europe .

Tavares, however, was clear his company is ready and does not want such a delay, although he acknowledged that meeting the moment is “super tough.”

“We have the technology, we have the platforms, we have the products, we have the capacities,” he said.

Contact Eric D. Lawrence: elawrence@freepress.com . Become a subscriber . Submit a letter to the editor at freep.com/letters .

This article originally appeared on Detroit Free Press: Stellantis CEO says US oversupply of vehicles will be fixed by Christmas