Stellantis CEO Carlos Tavares Takes Responsibility for U.S. Market Missteps

Tavares Acknowledges Failures and Charts Path Forward in Exclusive Fortune Interview...

Stellantis CEO Carlos Tavares. (Stellantis).

In a recent interview with Fortune magazine, Carlos Tavares, CEO of Stellantis, the European automotive giant behind brands like Fiat, Chrysler, and Jeep®, candidly addressed the company’s challenges in the U.S. market. Tavares took responsibility for a series of missteps that have led to a significant decline in sales and market share.

Stellantis has been grappling with declining sales and excessive inventory in the U.S., which Tavares attributed to three main issues: slow inventory reduction, manufacturing difficulties at unspecified U.S. plants, and ineffective marketing strategies. He openly admitted that his own “arrogance” had delayed the recognition and resolution of these critical issues.

“When I am saying we were arrogant, I’m talking about myself, nobody else,” Tavares acknowledged during Stellantis’s recent investor day. “I should have acted immediately, recognizing that the convergence of those three problems was there, and we had to set up a task force to address them.”

The repercussions were evident as Stellantis reported a 14% decline in U.S. sales in the first quarter of the year, contributing to a broader downturn in global revenues.

Despite these setbacks, Tavares emphasized that resolving manufacturing issues in the U.S. is not insurmountable. “It is something we have done tons of times, everywhere in the world,” he reassured.

Stellantis North American Headquarters in Auburn Hills, Michigan. (Stellantis).

Stellantis remains profitable due to a rigorous cost-cutting strategy that has seen the company reduce its workforce by nearly 50,000 employees since 2019.

In addition to addressing operational challenges, Tavares also expressed concerns about tariffs during his Fortune interview. Following the European Union’s imposition of tariffs up to 38.1% on Chinese carmakers, Tavares warned against a tariff-led race to the bottom. He highlighted potential retaliatory measures from Beijing that could disrupt Stellantis’s ability to sell cars in China and increase costs for essential EV components.

To navigate these challenges, Stellantis has proactively forged partnerships with Chinese manufacturers. Earlier this year, the company acquired a 21% stake in Chinese brand Leapmotor to bolster its presence in the affordable EV segment.

Tavares reiterated his commitment to competitiveness through product performance, range, and affordability. “We’re going to compete because we are a global company,” he affirmed.