On December 1st local time, Stellantis Group announced that its board of directors has accepted Carlos Tavares' resignation as CEO of Stellantis Group, effective immediately.
Henri de Castries, Senior Independent Director of Stellantis Group, said, "The success of Stellantis Group since its establishment has been due to the perfect synergy between shareholders, the board of directors, and the CEO. However, in recent weeks, different perspectives have emerged, leading to today's decision by the group's board of directors and CEO
It is reported that the process of appointing the new CEO of Stellantis Group is proceeding smoothly, managed by a special committee of the group's board of directors, and will be completed in the first half of 2025. Prior to this, Stellantis Group will establish a new interim executive committee chaired by the group's chairman, John Elkann.
In addition, Stellantis Group has confirmed that its previously released full year financial performance expectations for 2024 remain unchanged, with an adjusted operating profit margin of 5.5% to 7% and industrial free cash flow of 5 billion to 10 billion euros.
Sales decline, profit expectations' shrink '
According to public information, Stellantis Group was formed by the merger of Fiat Chrysler Automobiles and Peugeot Citroen in 2021, making it the fourth largest automaker in the world. Since the merger of Fiat Chrysler Automobiles and Peugeot Citroen, Tang Weishi has served as CEO. Previously, he held important positions at car manufacturers such as Renault, Nissan, and Peugeot Citroen. In 2023, he achieved a historic high of 18.6 billion euros in net profit for Stellantis Group through measures such as layoffs, streamlining product lines, and relocating production to low-cost regions.
However, as we enter 2024, Stellantis Group faces challenges in the North American market, with profits and sales continuing to decline. According to the third quarter financial report of this year, Stellantis Group's revenue decreased by 27% year-on-year to 33 billion euros, and its shipment volume decreased by 20% year-on-year. Among them, the delivery volume in the North American market decreased by 36% year-on-year to 300000 vehicles, with the highest decline among major regional markets. According to Automotive News Research& According to data from the Data Center, Stellantis Group's sales in the United States in the third quarter of this year decreased by 20% year-on-year, marking five consecutive quarters of decline. Sales are at their lowest level since the merger of Fiat Chrysler Automobiles and Peugeot Citroen.
Some argue that Stellantis Group's failure in the North American market is related to its high pricing strategy. Previously, due to supply-demand imbalance, its high pricing strategy was successful, but with changes in the market environment, the drawbacks of this strategy began to emerge. Stellantis adheres to a high pricing strategy and refuses to lower vehicle prices, resulting in inventory backlog and shrinking market share. According to CoPilot data, Stellantis Group's prices in the United States increased by 50% from 2019 to 2024, far exceeding the inflation rate of 23% during the same period. In addition, Tang Weishi's layoff measures have also caused dissatisfaction from the United Automobile Workers (UAW) in the United States, which once threatened to strike.
According to financial report data, Stellantis Group's net revenue for the first half of this year was approximately 85.017 billion euros, a year-on-year decrease of 14%; Net profit was approximately 5.647 billion euros, a year-on-year decrease of 48%. In terms of segmented markets, North America is the main contributor, contributing more than half of the overall operating profit (8.463 billion euros), which is 4.366 billion euros.
In the capital market, Stellantis Group is also quite disappointed. Public data shows that on November 20th, Stellantis Group's stock price closed at $12.85 on the New York Stock Exchange, a drop of over 40% since the beginning of the year, making it the oldest and worst performing traditional automaker on the Wall Street capital market.
Faced with unfavorable circumstances, Stellantis Group lowered its financial forecast for 2024 in September, expecting its operating profit margin to decline to 5.5% to 7%, far below its previous "double-digit" target; The expected free cash flow for the whole year has been adjusted from positive to between 5 billion euros and 10 billion euros. In October of this year, Stellantis Group also announced the launch of targeted management organizational changes.
The cooperation with Zero Run Motors is not affected
Focusing on the Chinese market, Stellantis Group has launched brands such as Peugeot, Citroen, and Jeep. In 2014, its joint venture company Dongfeng Motor Corporation and PSA reached a peak sales volume of 704800 vehicles, but then sales began to decline, with only 50000 vehicles remaining by 2020. Meanwhile, the dissolution of Changan PSA and the bankruptcy of GAC FCA have further affected Stellantis Group's performance in China.
Faced with challenges, Stellantis Group, under the leadership of Tang Weishi, launched the "Dare Forward 2030" strategic plan in March 2022, announcing the implementation of a "light asset" business model in the Chinese market to reduce costs. Dongfeng Peugeot Citroen Automobile will operate under a "two bedroom, one living room" model, with the Chinese side leading the Citroen brand and the French side leading the Peugeot brand, and sharing public resources such as manufacturing. In addition, Dongfeng Motor also plans to open up its manufacturing sector to third parties to improve capacity utilization.
Tang Weishi believes that Stellantis Group needs to maintain a certain level of exposure in China when it is not considered successful in the Chinese market. "To win the Chinese market, it is best to first obtain the help of a well-developed company in China.
In the Chinese market, Stellantis Group has also established a partnership with Leapmotor to accelerate its electrification transformation. In October 2023, Stellantis Group announced an investment of approximately 1.5 billion euros to acquire a nearly 20% stake in Leapmotor International and establish a joint venture with Leapmotor International. Stellantis Group holds a 51% stake and Leapmotor holds a 49% stake. The joint venture company is responsible for the export, sales, and local manufacturing of Zero Run cars worldwide (excluding Greater China).
It is reported that currently, Zero Run International has over 200 distributors in 13 European countries, with the goal of establishing 500 sales points in Europe by the end of 2025 and expanding its business to Asia Pacific, Middle East, Africa, and South America from the fourth quarter of this year.
After the news of Tang Weishi's resignation came out, the relevant person in charge of Stellantis Group China stated, "Tang Weishi's departure from Stellantis Group will not affect the cooperation between Stellantis Group and Leapmotor
Currently, Stellantis Group is actively promoting the electrification of its 14 brands, with 25 pure electric models and plans to add another 23 by the end of 2024. The group's goal is to have over 75 pure electric vehicle models by 2030 and achieve global annual sales of 5 million pure electric vehicles.