Stellantis CEO Carlos Tavares is gearing up to make some changes in the management of the automaker as an immediate response to the challenges that the company has been facing in North America and in its international market.
The potential management reshuffle comes after the automaker cut its annual forecasts due to intense competition from Chinese manufacturers in the electric vehicle sector, declining global industry dynamics, and higher costs associated with overhauling its operations in the U.S.
Bloomberg News reported that the changes could affect various departments, including finance teams, regional heads and brand executives.
The report said Tavares wants to address the declining sales and profits, which has put pressure on the financial outlook of the company.
In the U.S., the aforementioned issues have been very apparent as the company faces an inventory surplus, a weakening demand, and an ineffective product strategy.
One of the primary troubles that Stellantis has been facing is an overproduction of its high-end vehicles such as Ram and Jeep models. But the demand for these vehicles has significantly reduced, causing a higher inventory that the company may be struggling to sell.
Notwithstanding this issue, the carmaker does not have enough models that are considered as affordable for average American consumers who may not be looking at purchasing high-end vehicles. It is in this area that the company's rivals, those producing more affordable vehicles, are starting to gain a good ground in the market.
Amid the declining demand for their vehicles, the high interest rates being offered in financing new cars have become a burden to the average consumer and has also hampered sales.
Facing all these battles at the forefront of the market, the company tried to cut jobs at its plants. However, such a move harmed operations and did not sit that well on how consumers perceived the company. Instead of cutting costs, it also contributed to lower sales and has led to a more negative brand perception.
For the U.S., the company under the leadership of Tavares, has focused greatly on its electric vehicles, albeit not all Americans have already fully-embraced the new set of vehicles.
According to Reuters, Tavares may very likely present his proposal at a board meeting of the company that has been scheduled for next week.
At present, the company is looking for a successor to Tavares. His contract is reported to be ending in 2026. Still, the carmaker did not fully discount the idea that Tavares could extend his tenure.
