Stellantis says goodbye to “performance psychopath” CEO.

Carlos Tavares, a self-described “performance psychopath” who had driven auto giant Stellantis forward with aggressive cost-cutting and high car prices, reached the end of the road as CEO when his strategy hit a dead end.

Tavares orchestrated one of the most ambitious mergers in automotive history in 2021, bringing more than a dozen brands, including Jeep, Fiat, Chrysler, Peugeot and Citroen, under one roof.

The Portuguese manager, who was then leading the French group Peugeot-Citroen, was appointed CEO of the newly founded French-Italian-American giant called Stellantis.

His three-year tenure was marked by high profit margins that were the envy of his rivals in the auto industry, but the good times ended this year when sales collapsed in the United States, the group’s key market.

Stellantis announced his abrupt departure Sunday evening in a statement that hinted at tensions in the boardroom.

Henri de Castries, an independent director on the Stellantis board, said in the statement that “different views have emerged” in recent weeks that led to the decision.

Tavares, 66, brought to Stellantis the same strategy that he had implemented at Peugeot-Citroen, which he had led since 2014, when he took over as head of the French car group.

He placed high demands on his teams and his cost management included cutting jobs, closing factories and tough negotiations that angered suppliers.

Tavares championed a “pricing power” strategy for Stellantis brands by setting high prices for models and eliminating markdowns that hurt margins.

After a string of record-breaking quarterly results, Stellantis lowered its annual profit outlook in late September, citing “deterioration” in the global auto sector and problems in the American market.

The situation with Dodge cars and Ram trucks was particularly worrying for Stellantis executives and financial markets as new vehicles piled up on dealers’ lots as high prices and quality concerns turned off customers.

– Stellantis ‘squashed’ –

In Europe, the Fiat, Citroen and Maserati brands suffered from delayed launches of new models, partly due to software problems.

“This is the end of the cost-cutting strategy,” said German auto analyst Matthias Schmidt.

“All the juice has been squeezed out” in what is now a “very weak market” that refuses to return to pre-Corona crisis levels.

Like Volkswagen, Stellantis also tried to produce as many models as possible on the same platform.

But customers of its premium brands such as DS, Alfa Romeo and Jeep were increasingly unwilling to pay a premium price for cars that were not all that different from Stellanti’s mass-market brands.

The story continues