Just nine months ago, Carlos Tavares looked like one of the most unassailable chief executives in the automotive business.
The former Stellantis boss – whose abrupt departure emerged late on Sunday – had overseen yet another year of record profits at the world’s fourth-biggest carmaker.
This was partly the result of relentless cost-cutting, after the Portuguese executive in 2021 masterminded the stitching together of Fiat Chrysler and PSA Group to create a carmaking Frankenstein’s monster.
But behind the enormous scale of Stellantis, problems have been brewing that have since brought Tavares’s tenure to a screeching halt. They threaten to create a nightmare for his successor as well.
Among them is the question of whether Stellantis, a global behemoth spanning 14 brands including Vauxhall, Fiat, Peugeot and Jeep, can continue as a vast chimera, analysts said on Monday.
At the same time, the chief executive’s demise is the latest sign of turmoil gripping Europe’s car industry as Chinese rivals muscle in to their markets around the world.
“The situation is getting so difficult, not just for Stellantis but for all the legacy Western carmakers,” says Felipe Munoz, an auto industry analyst at Jato Dynamics.
“Tavares’s approach of cutting costs worked up to a point, when there wasn’t so much pressure from China.
“But what we are seeing is that this strategy has limits.”
An engineer by training and a race car obsessive, Tavares earned a reputation among investors for gripping costs and delivering double-digit profit margins no matter what.
He rose through the ranks at Renault – where he began as a test car driver – and Nissan, before taking over as chief executive of PSA Group in 2014, the French giant best known for Peugeot and Citroën.
There, he oversaw a spectacular turnaround and the acquisition of the Opel and Vauxhall brands from General Motors in 2017.
But his masterstroke followed six years later, when he agreed a mega-merger with Fiat Chrysler, the Italian car giant controlled by the powerful Agnelli family.
Three years of record profits followed, as he once again bore down on costs and delivered bigger savings than many investors had dreamed. It looked like classic Tavares.
“Carlos is probably the smartest guy I’ve ever worked with,” says Andy Palmer, a former Nissan executive who worked with Tavares at the Japanese company.
“His knowledge of the car is extraordinary, he’s a real product guy. But he also has a very sound understanding of finance and business, so he’s a rare talent.
“I wouldn’t say he’s ruthless, but he can sometimes come across as a bit of a cold fish – and that has allowed him to get things done.”
As with many leaders, however, the qualities Tavares was praised for at the height of his powers have now been blamed for his undoing.
In July, it became clear that Stellantis was in big trouble when the company revealed half-year profits had collapsed from €10.9bn (£9.1bn) to €5.6bn.
Worse, many of the problems appeared to have their genesis in the chief executive’s tough-love approach. Critics complained of stagnating product ranges, high prices, quality issues and falling market shares in nearly every region.
In Europe and Turkey, the company’s share has dipped from 22.3pc to 19.3pc since 2020, according to Jato Dynamics, with its share in North America falling from 12.4pc to 9.7pc.
In China, a slim share of 0.5pc has shrunk further to 0.3pc over the same period. The only bright spot is in the Middle East and Africa, where it rose from 3.7pc to 4pc.
Tavares, who said he was humbled by the July numbers, put the problems down to a “bump in the road” and immediately set about reshuffling executives and trying to impose tighter discipline – suggesting he was intent on sticking around.
But the dismal results were followed by a profit warning in September that wiped 50pc of the value from Stellantis shares. Then the company announced in October that Tavares would step down in early 2026.
By Sunday night, the chief executive’s fate was sealed as the company confirmed his departure amid reported differences with the board over future strategy.
On Monday, insiders claimed Tavares had been moving “too fast to retrieve his reputation”, and was too focused on the short term, managing to “anger everybody in the process”, according to the Financial Times.
Industry experts also pointed to a plethora of disputes the chief executive had become embroiled in around the world.
In Italy, Stellantis has been engaged in a war of words with Georgia Meloni’s government over the company’s decision to move production of Alfa Romeo cars to Poland.
Ministers in the Meloni administration accused the company of trying to mislead consumers with the “Italian sounding” name of Milano for a foreign-made SUV model, which was later renamed Junior.
The row has become a thorn in the side of John Elkann, head of the Agnelli family, who has found himself criticised publicly as well. Elkann personally alerted Meloni of Tavares’ impending resignation, according to Bloomberg.
Elsewhere, Stellantis has heavily criticised electric vehicle sales targets in the UK and recently announced the closure of its van factory in Luton.
And in North America – traditionally its biggest market – Tavares was accused by dealerships and unions of leaving brands including Chrysler, Dodge, Jeep and Ram in an “anemic and diminished state” following mass layoffs, production cuts, rows with suppliers and quality control issues.
In September, Stellantis was forced to recall 194,000 hybrid Jeep SUVs to address fire risks involving a battery component.
On top of all this, Stellantis, like rivals such as Renault and Volkswagen, is battling for market share around the world, with low-cost Chinese brands racing ahead in the electric vehicle (EV) segment.
“Carlos came under attack in Italy because the company was seen as being more French centred. Then he came under attack from the Americans, with Jeep essentially failing. So he has really suffered at the hands of both geopolitical and ownership issues,” observes Palmer.
Many now think Stellantis will struggle to revive itself while struggling under the weight of so many marques – not least similar mass market brands such as Citroen and Fiat.
The transition to EVs is forcing car makers that have spent decades perfecting and outsourcing their supply chains to bring more production back in-house, while differing regulatory approaches in China, Europe and the US – where Donald Trump is poised to rip up Joe Biden’s EV mandate – are creating further complications.
Moreover, many European companies simply cannot compete with their vertically-integrated Chinese counterparts on manufacturing costs.
This is why Volkswagen is undergoing its own painful shake up that could see it lay off tens of thousands of workers and close factories in Germany for the first time.
Against this backdrop, says Jato’s Munoz, whoever takes over from Tavares is bound to look at shutting down or spinning off some of the brands that currently sit in the Stellantis tent.
“I expected him to do that when Stellantis was first created,” Munoz adds. “Because you know, 14 brands is too much, especially if many of them are direct competitors.
“There isn’t room for so many right now, because the markets are saturated and we have the Chinese coming.”
Another analyst agrees, saying: “They have delivered on costs but they have failed in making sense of the brands.
“How can you lose so much market share when you have so many brands? You are not managing them well.”
Ultimately, Munoz says, Tavares’s biggest legacy will be the creation of Stellantis – though whether it survives the company’s next phase is up for debate.
“I think there are going to have to be some big decisions soon,” Munoz adds.
Nine months ago, it was a safe bet that Tavares would be the man making them. Now, someone else will be trying to keep the monster he created under control.
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