Car business suffers one other breakdown: Vauxhall-owner Stellantis shares plunge as boss quits

The global car industry suffered another convulsion yesterday as shares in Vauxhall’s owner plunged following the surprise exit of its chief executive.

Stellantis’s stock, which is listed in Paris and Milan, tumbled 6.3 per cent to its lowest level in more than two years as Carlos Tavares, one of the most respected figures in the industry, dramatically resigned on Sunday ahead of his expected retirement in early 2026.

Tavares’s departure came after his reputation took a hit in September when the company issued a major profit warning amid intense competition from Chinese rivals and weak US demand.

‘This sets an unprecedented challenge for investors looking to invest in a firm with such volatility in the management team,’ said analysts at investment bank JP Morgan.

Analysts at broker Jefferies added that his exit, thought to have been the result of a row over corporate strategy between the chief executive, the board and major investors, would ‘cast doubts’ about the effectiveness of Stellantis’s model of multiple car brands being owned by a single conglomerate.

The departure of Tavares, 66, came days after Stellantis – which also owns brands including Jeep, Fiat and Peugeot – announced plans to close its Vauxhall factory in Luton, putting more than 1,100 jobs at risk.

The problems highlight the misery facing global car makers, who find themselves caught in a perfect storm of falling demand, rising competition and increasing pressure from governments to adapt their production to hit net-zero targets.

Volkswagen (VW) is embroiled in a dispute with workers over plans to close at least three of its German factories and lay off thousands of staff alongside a 10 per cent pay cut for those remaining.

Meanwhile, Japanese group Nissan is facing a make-or-break year.

Last month, it unveiled plans to axe 9,000 jobs as it tries to keep itself afloat amid plunging profits and an exodus of senior executives that has left it on the brink of collapse.

Boss Makoto Uchida has presided over the company’s worst share price performance in 50 years.

The company’s fate has big implications for the UK, where Nissan employs 7,000 staff, mostly in Sunderland.

Ford, the long-dominant US motoring group, is also struggling to adapt. 

Last week, UK boss Lisa Brankin called on the Government to introduce incentives to encourage drivers to buy electric vehicles after the firm announced 4,000 job cuts in Europe over the next three years, including 800 in Britain, due to low demand and competition pressures.

Industry watchers say all the major car brands are suffering from a poisonous cocktail of sluggish demand for electric cars and rising competition from China. 

Chinese car makers, on the back of substantial subsidies from Beijing, have begun to dominate their domestic market and are now looking to break into other countries, adding more competition to the sector.

America has already slapped a 100 per cent tariff on imports of Chinese electric cars.

In October, the EU approved plans for tariffs of up to 45 per cent on electric cars from China.

But the Government seems unlikely to follow the examples set in Washington and Brussels, with Prime Minister Keir Starmer having recently met with Chinese president Xi Jinping in a bid to thaw relations between the two countries.

Andy Palmer, the former boss of Aston Martin, said the situation reminded him of when Japanese car makers first began to challenge their Western counterparts in the 1970s and 1980s.

He told the Mail: ‘At that time, it did seem like the Japanese were eating everybody’s breakfast and right now it feels like the Chinese are eating everybody’s breakfast.’

He added that the crisis-hit automakers were now paying the price for adapting too slowly as rivals surged ahead.

‘Nissan, Ford and Stellantis were particularly slow to react to a changing world,’ he said.

Factory closures in Britain are also intensifying a row between the industry and ministers over targets intended to boost the number of electric cars on the roads.

Electric cars must make up at least 22 per cent of sales for car makers this year, a figure that will rise to 80 per cent by 2030. Firms that fall short face hefty fines.

Labour has also pledged to reintroduce a ban on new petrol and diesel cars by 2030 after the Conservative government previously pushed back the deadline to 2035.

But car makers have urged the Government to rethink the targets, warning that falling demand for electric vehicles from consumers means they are being forced to close factories and cut jobs instead.

The Government’s stance appeared to soften last week when Business Secretary Jonathan Reynolds admitted to MPs that the electric vehicle mandate was ‘not working as anyone intended’.

David Bailey, a car industry expert at the University of Birmingham, said the Government needs to find ways to stimulate demand for electric cars and that ‘simply telling car firms to supply electric vehicles isn’t going to cut it’.