Updated 12/2/2024 — Stellantis CEO Carlos Tavares resigned Sunday, effective immediately. The company cited “differing views” between Stellantis and the Board of Directors. The company says the search for his replacement is already “well under way.”
“You could expect decisions in two to three years.” With those words, Stellantis CEO Carlos Tavares started a countdown that could see some storied car brands sold off or shuttered as soon as 2026.
There are plenty of reasons to be skeptical – not least of which is that Tavares won’t be around to make good on his threat. But some names as old as Chrysler and Fiat could be in for a major shakeup soon.
A Quiet Giant
Most Americans are familiar with Ford and General Motors. Most know the old auto industry term “The Big Three” or the more current “The Detroit Three.” But fewer could name the third.
Yet Stellantis is, by most measures, the largest of the three. Historically, Americans thought of Chrysler as the third of the three. But Chrysler has changed ownership many times. Stellantis was formed by the 2021 merger of Fiat Chrysler Automobiles with PSA Group, the French company behind Peugeot, Citroën, and other car brands.
Today, Stellantis operates a surprising 14 major auto brands worldwide. In the U.S., its nameplates include Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, Maserati, and Ram.
A Troubled Giant
In recent years, many of those brands have miscalculated.
Stellantis trimmed lower-priced entry-level models from most of its brands.
Some got luxurious models to sell instead. Even Jeep, the favored brand of off-roaders, pursued luxury buyers with models like the Wagoneer (available with seven different screens inside) and Grand Wagoneer (topping out at over $120,000).
Others were just left with stripped-down lineups. The 2025 Chrysler lineup consists entirely of minivans – the upscale Pacifica and reborn Voyager, which is essentially a bare-bones trim level of Pacifica.
Fiat, reintroduced to the American market for the 2012 model year after a long absence, has a full lineup of vehicles in Europe. In America, it’s down to one for 2025 – the cute but rare 500e electric car. Many Fiat dealers have leftover 2023 500x subcompact SUVs to sell, too.
The move upscale seemed to work for a while. However, many analysts believe the COVID-19 pandemic and the shortage of new car production that came with it helped prop the company up. “Many buyers spent big on large, expensive vehicles when they couldn’t travel or dine out,” CBS News explains.
With fewer cars available in the first place, Americans also overpaid because they had no choice.
Now that those days are over, the brands are left with small lineups of expensive cars. “Much of Stellantis’ product lineup is old, with few recent updates,” CBS adds.
High interest rates led Americans to look for bargains in 2024. Stellantis dealers didn’t have many to offer them.
Oversupply Problems
Stellantis brands may have fewer models than competitors. But they have more of them available.
“Sales in the first half of 2024 fell 14%, and profits plummeted by nearly half,” CNBC explains. But production remained high.
That has left Stellantis brands with an oversupply problem.
Dealerships typically aim to keep about 60 selling days’ worth of cars on the lot, with another 15 days on order or in transit. Much of the auto industry is close to that target late in 2024. Stellantis brands are well over it.
Ram dealers entered October with a stunning 142-day supply of trucks to sell. Dodge dealers have 131; Jeep dealers, 126.
Dealers in Revolt, Management Shakeup Started
The problems grew severe enough to put dealers in conflict with company leadership this year. Dealers sent a “blistering letter” to Stellantis “calling out Tavares over the direction of the company,” the Detroit Free Press reports.
Stellantis took the rare step of responding publicly, saying, “We don’t believe that public personal attacks, such as the one in the open letter from the NDC president against our CEO, are the most effective way to solve problems.”
However, the letter seems to have jumpstarted a response. The company “announced a number of significant leadership changes, including the timing of CEO Carlos Tavares’ retirement and the departure of its chief financial officer,” the AP explains.
Tavares isn’t leaving immediately. But the company has said it won’t extend his contract, which ends in 2026. A search for his replacement has already begun.
Brand Review to Come
That replacement, Tavares says, may shutter some brands. Tavares, speaking at this week’s Paris Motor Show, told trade publication Automotive News the company has long planned to review its portfolio by 2030. But the company may speed up the process, and will “review the performance of all its brands to determine whether to reduce the size of its portfolio as early as 2026,” AN reports.
The company could sell off some brands without affecting American car shoppers much. “Analysts have hypothesized that Maserati, Lancia, or DS,” the latter two not sold in the U.S., “may be targets for a sale, given their smaller profile,” MSN explains.
Rumors persistently threaten Chrysler with its current tiny lineup. Closing a brand in America is complicated because of the complex relationship between automakers and their dealers. Chrysler will also celebrate its 100th birthday in 2025. A century of brand equity is a lot to give up.
Reinvigorating Chrysler might be a better bet than ending it. The company could also choose to keep a brand like Fiat in Europe, where it is successful, but pull it out of the U.S., where it is struggling.
Dealers, for their part, “left meetings this week with the automaker’s executives’ cautiously optimistic,’” according to the Detroit News.
