Stellantis has experienced a significant decline in U.S. sales, with a 16% drop in the first half of this year.
Breaking down the performance of its American brands through June, Jeep saw a 9% reduction in sales, while Ram took a harder hit, plummeting by 26%.
Chrysler sales fell by 8%, and Dodge was down by 16%. With weakened demand, unsold inventory is piling up, prompting Stellantis to implement new measures to address the overflow.
Previously, Stellantis aimed to limit its U.S. inventory levels to 330,000 vehicles by the first quarter of 2025. However, the company has now accelerated that goal, targeting the end of this year for normalization.
To achieve this, Stellantis is offering larger discounts on 2024 model year (MY) and older vehicles, suggesting that a significant number of cars have been sitting on dealer lots for over two years.
For the second half of 2024, Stellantis plans to ship 200,000 fewer vehicles to U.S. dealerships than it did in the first half of 2023. This figure represents double the initial reduction Stellantis projected.
The company attributes these challenges to a “deterioration in the global industry backdrop” and acknowledges the growing competition from Chinese automakers.
CarEdge’s analysis highlights some of Stellantis’ slowest-selling models in the U.S. market. Topping the list is the Alfa Romeo Giulia, with an inventory supply of 617 days as of September.
The Stelvio follows in third place with 456 days of supply, and the Fiat 500e is close behind with 454 days.
Other slow-moving models include the now-discontinued Jeep Renegade (eighth place with a 332-day supply), the Grand Wagoneer L (ninth place with 327 days), and the Dodge Hornet (tenth place with a 323-day supply). These vehicles are likely to see steep discounts as dealers work to clear their lots.
Stellantis has revised its 2024 financial outlook, lowering its projected adjusted operating income margin from double digits to a range of 5.5% to 7%.
Roughly two-thirds of this reduction is attributed to “corrective actions in North America.” Initially, the company anticipated positive industrial cash flow, but now estimates a deficit of €5 billion to €10 billion.
The situation has grown so dire that the Stellantis National Dealer Council in the U.S. penned an open letter to CEO Carlos Tavares, warning of an impending “disaster.”
The letter also criticized Tavares for the “rapid degradation” of brands like Jeep, Ram, Dodge, and Chrysler.
While Tavares’ current contract runs until January 2026, Stellantis chairman John Elkann recently confirmed that the search for his successor is already underway.
However, a Stellantis spokesperson stated that beginning the search process early is standard practice, and Tavares may remain with the company beyond the expiration of his five-year contract.
