Automotive

Tavares: 'My retirement? An option. And on Renault only speculation'

The CEO of Stellantis commented on his possible exit and the merger hypothesis after a visit to the historic Peugeot plant in Sochaux

by Redazione Finanza

3 October 2024

Il ceo di Carlos Tavares risponde alle domande dei giornalisti dopo aver assistito alla visita della linea di produzione delle nuove auto elettriche Peugeot e-3008 ed e-5008 presso la fabbrica di Sochaux. (Foto di FREDERICK FLORIN / AFP)

3' min read

Carlos Tavares, CEO of Stellantis said that he might retire in January 2026, at the end of his first term at the helm of the Stellantis automotive group. "In 2026, the person who answers you will be 68 years old, a reasonable age to retire. That is the option,' Tavares said after a visit to the historic Peugeot plant in Sochaux.

"If you ask my wife, she will tell you that it is a requirement on her part. I am a good husband,' added the ceo of Stellantis, a group he helped found in 2021 with the merger of French Psa (Peugeot-Citroën) and Italian-American Fca (Fiat-Chrysler). Stellantis initiated a succession process, as is physiological for a group of this size, according to the company at the end of September. An ad hoc board meeting, 'planned for some time', will be held in the coming days at the US headquarters in Auburn Hills, near Detroit.

Tavares, pledged to maintain the dividend and buyback programme for this year, but did not rule out cuts in 2025, as investors fear that the carmaker's financial problems will hamper future payments.

As for the rumours circulating in the media in recent days about a possible merger between Stellantis and Renault, aimed at creating a giant capable of competing with the aggressive legion of Chinese manufacturers, 'they are pure speculation,' said the CEO of Stellantis. The difficulties the group is facing, however, 'do not call into question its strategy'. Last Monday, revised downwards the 2024 targets. In particular, the operating margin is now estimated at between 5.5 per cent and 7 per cent, compared to a previously estimated 'double-digit' value (around 10 per cent). The main reasons include a general deterioration in the car market and difficulties in the US market, where there is overstocking and a sharp drop in sales and profits. In this regard, Tavares added that the 15 months he still has at the helm 'are more than enough time to turn things around' and get the group back on track.

Stellantis rivede al ribasso risultati 2024 e sprofonda in Borsa

'Stellantis is not the only one in trouble, it is not isolated in the automotive industry. So are Volkswagen, Bmw, Mercedes, and it's probably not over yet'. The industry environment is 'extremely brutal', warned Tavares, also pointing the finger at (European) regulation and Chinese competition and stressing that, in this context, 'if you make a small operational mistake' you pay immediately.

The profit warning, for example, was also due to the hesitation of Stellantis top management to decide on appropriate countermeasures in North America. This had very serious implications for Ebit and short-term cash flow, analysts at Barclays wrote. The bank claims that the CEO admitted to an 'arrogant' attitude when he did not adjust US production. A choice that led to an implicit 80% cut in second-half Ebit. 'Stellantis was too slow to recognise the US inventory problem and the erosion of EU/US market share'. Barclays cut its 2024-2026 Ebit expectations by 33%-45% and, given that a recovery is unlikely before the first half of 2025 at the earliest, downgraded the stock to neutral from overweight. Halved the target price to EUR 12.50 from EUR 23.

And there is no peace at Piazza Affari for the Stellantis share, which is down four points to EUR 11.9 at the tail end of the Ftse Mib, due to the downgrade by Barclays, the drop in sales in the US and the drop in Italian production in the first nine months of 2024. The stock is at its lowest level since July 2022, has touched a day's low of EUR 11.8, and is down 43% since the start of the year and 56% from the highs reached on 25 March. (Al.An.)