Carlos Tavares is under increasing pressure to straighten out the automaker’s North American operations. According to Bloomberg News
the board of directors is expected to discuss the future of the CEO during the two-day meeting.
Stellantis is currently looking to replace Tavares, whose contract expires in 2026, but the company has previously hinted that the CEO could extend his term.
For the time being, Stellantis did not wish to comment on the case.
The world’s fourth-largest carmaker by volume is currently facing serious challenges: weakening global demand, excess inventory and strong competition from Chinese competitors both complicate the company’s situation. In particular, the North American market is causing problems for Stellantis, the significant drop in sales and profits here resulted in a sharp drop in the share price.
Declining demand has forced the company to cut prices on some high-margin Jeeps and pickup trucks. Last week, Stellantis adjusted its 2024 profit forecast downwards, according to the new forecast, the net profit margin of Stellantis is expected to be between 5.5 and 7.0% this year, which is significantly lower compared to the previous double-digit expectation. In addition, they are also forecasting a negative change in industrial free cash flow: instead of the previous positive outlook, the company is now expecting a value between -5 and -10 billion euros. In addition, the company promised to reduce production and introduce significant price discounts in order to boost the American business.
Source: Reuters
Cover image credit: Jonathan Weiss via Getty Images
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Source: www.portfolio.hu
