Stellantis’ (NYSE: STLA) credit rating is under review by DBRS Morningstar due to its weaker-than-expected operating performance so far this year, the rating agency said on Tuesday.
The carmaker’s CEO Carlos Tavares resigned on Sunday, a move which investors and bankers familiar with the matter attributed to his clashes with the group’s board over his plans to cut costs too quickly to turn around the ailing U.S. business, rather than focusing on long-term strategy.
Tavares’ departure is certainly not a shock and has no immediate effect on the group’s rating, Morningstar said in a note.
“However, while we had anticipated a moderation in Stellantis’ earnings this year, the markedly weaker operating performance YTD has exceeded our expectations”, it said.
It added that an updated view on the group’s credit will come in early 2025 when it can assess Stellantis’ performance in the U.S. market, including its inventory reduction targets and its earnings prospects next year.
The automaker issued a profit warning in September due to slumping sales and bloated inventories in the more profitable North American market, while global car demand remains sluggish and competition from Chinese rivals intensifies.
