MILAN (Reuters) -Antonio Filosa was appointed chief executive of automaker Stellantis on Wednesday, following the departure of Carlos Tavares in December. Here are some the main challenges he faces.
Challenges Ahead for New Stellantis CEO Amid Sales and Tariff Issues
MILAN (Reuters) -Antonio Filosa was appointed chief executive of automaker Stellantis on Wednesday, following the departure of Carlos Tavares in December.
Here are some the main challenges he faces.
REGAIN MARKET SHARE
The first task will be to revive sales at Stellantis, the world's No. 4 automaker by sales, which has lost market share in the U.S. and Europe.
Dealers on both sides of the Atlantic complained that rising prices at its mass-market brands under Tavares put vehicles beyond the reach of many customers.
Delays in model launches, disappointing EV demand and increased competition from Asian rivals also led to bloated inventories of unsold vehicles that weakened the group's results.
ELECTRIC VEHICLE TRANSITION
Automakers face regulatory uncertainty after U.S. President Donald Trump turned against EVs, and many expect Europe could also slow the shift towards electrification in the industry.
Stellantis, whose brands include Fiat, Peugeot and Jeep, has a target for all of its European passenger car sales to be electric by 2030, and for half of its cars and light-duty truck sales in the U.S. to be electric by the same date.
However, after EV sales growth slowed in many markets, Stellantis has increased its focus on hybrid models as a compromise between the need to reduce carbon emissions and meet customer demand for cheaper vehicles.
At the same time, automakers such as Stellantis must seek to keep pace with innovation in the EV sector, which is dominated by Tesla and Chinese competitors.
US TARIFFS
In April, Stellantis suspended its guidance for a moderate recovery this year, after a profit drop in 2024, due to the uncertain impact of Trump's tariffs.
The Jeep and Chrysler maker last year imported over 40% of the 1.2 million vehicles it sold in the United States, mostly from Mexico and Canada.
CFO Doug Ostermann said the company was talking to suppliers about increasing U.S.-made content in its vehicles to reduce the impact of tariffs.
The company operates assembly plants in Mexico that make Ram pick-ups and vans, as well as the Jeep Compass mid-sized SUV.
The group owns two assembly plants in Canada. In one, it makes Chrysler models, and another is scheduled to resume output of a new Jeep model this year.
BRAND PORTFOLIO
The new CEO faces tough decisions on the company's 14 brands, a legacy of its creation through the merger in 2021 of Fiat Chrysler and France's PSA. Tavares said last July he might be prepared to axe underperforming brands.
Brands seen by analysts as vulnerable include premium marques Alfa Romeo, DS and Lancia.
They expect Dodge and Chrysler to survive, despite a less than stellar performance, as they have U.S. driver recognition and appeal to specific market segments.
SUPPLIERS
The new CEO will also need to pursue an effort, initiated by Chairman John Elkann, to rebuild relations with suppliers, after Tavares' focus on cost-cutting.
Many long-standing Stellantis suppliers have come under pressure from lower demand and margins and the group's attempts to move its operations to low-cost countries to increase efficiency.
CAPACITY OVERHANG
In common with other legacy automakers, Stellantis has excess production capacity, especially in Europe.
Analysts estimate Stellantis' capacity utilisation in Europe and North America is between 50% and 60%. Competitors, such as Volkswagen and Ford, have tackled this problem, including through plant closures and job cuts.
Any measures by Stellantis to adapt to the stagnating auto market by adjusting capacity to try to boost profitability would inevitably have an impact on the group's relations with governments and unions.
CHINA CHALLENGE
Stellantis has no significant presence in China, but Chinese automakers have taken an increased share of the European market, especially with their competitively priced EVs.
It responded by teaming up with China's Leapmotor in what is sometimes referred to as the group's 15th brand.
Stellantis holds a 51% stake in their Leapmotor International joint venture and has exclusive rights to build, export and sell Leapmotor products outside China in the first such arrangement for a legacy Western automaker.
(Writing by Keith Weir and Giulio Piovaccari, editing by Alvise Armellini and Barbara Lewis)
