BREAKINGVIEWS-New Stellantis CEO reflects carmakers’ grey skies

By Neil Unmack

LONDON, May 28 (Reuters Breakingviews) - Companies facing adversity often look outside for leadership. That’s occasionally been the case for the car sector, where some of the most iconic bosses were by no means industry veterans. Think of Fiat Chrysler Automobiles’ old CEO Sergio Marchionne, who previously worked at a testing and certification company, or Ferrari’s RACE.MI current boss Benedetto Vigna, who joined from a chipmaker. Yet Stellantis STLAM.MI, the $30-billion Jeep maker, on Wednesday said it had picked company veteran and consummate automative insider Antonio Filosa as its new chief. It’s a logical move that highlights deep challenges in the here and now.

Filosa’s hire arguably reflects a trend. Volvo Car VOLCARb.ST, previously led by Dyson executive Jim Rowan, recently turned back to its former CEO Hakan Samuelsson to steer a turnaround amid declining electric vehicle sales. Stellantis’s Filosa, who has led the group’s American businesses, also looks like a safe pair of hands.

The U.S. market is arguably Stellantis’s biggest worry right now. Former boss Carlos Tavares, who oversaw the merger of Fiat Chrysler and Peugeot, abruptly left last year after he had ramped up prices and cut costs heavily, leaving the group with unsold cars. The good news is that the company has already been cutting prices and clearing excess inventory. The tough part, for Filosa, will be rebuilding market share, which requires investment. In the first quarter of 2025, Stellantis’s North American share of sales was just 7.1%, versus 10% two years ago. A key test will be the launch later this year of a new Jeep Cherokee SUV.

The U.S. turnaround comes at a tumultuous time. President Donald Trump is imposing up to 25% levies on some cars and auto-parts entering the country. Stellantis, which imports some 35% of its U.S. sales, has yet to quantify the hit. There’s hope that a series of bilateral deals, like the one agreed between the United States and Britain, could lower the burden. Yet it will still likely face a period of diminished margins and upheaval. UBS analysts are pencilling in a 4-billion-euro tariff-induced restructuring hit.

Chinese carmakers like BYD, meanwhile, are doing well abroad. That could put pressure on Stellantis’s most profitable operations in the Middle East, Africa and South America. Europe is still in the middle of a painful transition to electric vehicles, and Stellantis’s plants in the region were already operating at less than 50% capacity in 2024, Bernstein reckons. That all means Filosa is unlikely to be able to deliver a rapid turnaround.

Unlike with an outsider, though, Filosa will be up to speed with the manufacturing problems. There are other issues on the horizon, like the threat from software players trying to enter the car, but Stellantis doesn’t have the luxury of worrying about them right now. A valuation of five times forward earnings, per LSEG data, behind both Ford Motor F.N and General Motors GM.N, suggests shareholders are at least strapped in for a long drive.

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CONTEXT NEWS

Stellantis on May 28 named Antonio Filosa as its next chief executive.

Filosa, who is currently chief operating officer for the Americas and chief quality officer, will fill the gap left by the abrupt departure of previous CEO Carlos Tavares in 2024.

Stellantis shares were roughly flat as of 0820 GMT on May 28.