Stellantis sales in the United States dropped by a worrying 16% in the first half of the year. Looking at how the American brands fared through June, Jeep fell by 9% while Ram plummeted by 26%. Chrysler suffered an 8% decline and Dodge was down by 16%. Because demand is weak, the inventory is rising, so Stellantis is taking a few measures to try and normalize this overflow of unsold cars.
It had previously established to limit inventory levels in the United States to 330,000 vehicles by the first quarter of 2025. It now wants to achieve its goal by the end of this year. How? By offering bigger discounts on 2024MY and older cars. That tells us Stellantis has an unspecified number of vehicles sitting on dealer lots for at least two years.
In the second half of 2024, the automotive conglomerate wants to ship 200,000 fewer cars to US dealers than it did in H1 2023. That effectively doubles the number of vehicles compared to the previous estimate made by Stellantis. Who’s to blame? The world’s fourth-largest car manufacturer cites a “deterioration in the global industry backdrop” while admitting it’s facing increasing Chinese competition.
According to an analysis by CarEdge, the Alfa Romeo Giulia is the slowest-selling car in the US considering an inventory supply of 617 days in September. The Stelvio is in third place with 456 days, followed by the Fiat 500e with 454 days. The defunct Jeep Renegade is eighth with a 332-day supply while the Grand Wagoneer L is ninth with enough cars for 327 days. The Dodge Hornet is in tenth place with a 323-day supply. You could probably get a good deal on any of these cars as dealers are eager to get rid of the excess inventory.
Stellantis has updated its outlook for 2024 from a double-digit adjusted operating income margin to anywhere between 5.5% to 7%. Approximately two-thirds of the drop is caused by “corrective actions in North America.” Initially projected to be positive, the industrial cash flow is now estimated at -€5 billion to -€10 billion. Yes, with a minus.
Things are so bad that the US Stellantis National Dealer Council sent an open letter to Carlos Tavares, accusing him of an imminent “disaster.” In addition, the head honcho is blamed for the “rapid degradation” of Jeep, Ram, Dodge, and Chrysler. The CEO’s contract expires in January 2026 but Stellantis chairman John Elkann recently said search has already started for a replacement.
However, a spokesperson for the automotive juggernaut declared it’s normal to start the search process. As a matter of fact, Tavares might stick around even after his current five-year contract ends.
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