Stellantis Dealers Seek CEO’s Aid Amid Sales Slump

In a turbulent market, Stellantis is grappling with significant setbacks in the U.S. market. During the Q2 2024 period, the parent company of Chrysler, Dodge, Jeep®, Fiat, and Ram saw a sharp 21% decline in sales, contributing to the highest dealer inventory levels across the industry.

In late May, dealers representing Stellantis’ brands contacted CEO Carlos Tavares, expressing their concerns through a detailed letter. Kevin Farrish, Chairman of the Stellantis National Dealer Council, emphasized the clarity of the dealers’ message about their struggles.

Farrish and other dealers met with Tavares and North America COO Carlos Zarlenga in Detroit to address critical issues such as insufficiently allocating popular trim levels for specific models. According to Automotive News, these discussions continued in a June council meeting, focusing on pricing strategies, incentives, and the impact of a system outage from CDK Global.

“We’ve been in this business for a long time and understand what works in America,” said Farrish, owner of Farrish CDJR in Fairfax, Virginia. “To reclaim our market share, we need to collaborate effectively, and I feel we’re improving in that regard.”

Despite the Chrysler and Dodge brands having smaller lineups, dealer inventory levels have not decreased.

“Our dealer inventories have continued to grow, and it’s just now that this is the tipping point,” Farrish said. “Unfortunately, from a dealer perspective, we’re carrying that extra inventory weight during periods of very high interest rates, so the dealer body is really getting harmed by that.”

Stellantis highlighted the importance of its dealer network, stating, “We have been meeting regularly since the start of the year and are fully engaged. Our teams are working together to develop the right solutions to grow our iconic brands and ensure the success of our multi-energy lineup. Our top leadership is fully committed to our dealer network, and we’re already seeing sales momentum over the first two months of the summer. We see incredible opportunities for growth and recapturing market share.”

Following the meeting with Tavares, Stellantis began allowing dealers to order previously unavailable vehicles, including base models of the Grand Cherokee Laredo A and Wrangler Sport and the more optioned-out Grand Cherokee Limited.

To improve sales, Stellantis implemented price cuts of up to $4,000 on the Grand Cherokee and discounts of up to $2,000 on other vehicles as part of a summer campaign. These reductions address the issue of Stellantis’ prices generally being higher than those of rival automakers.

Even with the incentives, Jeep, the automaker’s biggest brand, is on track for the sixth consecutive year of declining volume, with a 19% decline in Q2 2024 and a 9.3% decrease in H1 2024. While Jeep is hoping to boost its global sales with its all-new, all-electric Wagoneer S and Recon, dealers are missing its more value-friendly models, like the subcompact Renegade and midsized Cherokee, which were both discontinued in 2023.

“They had a $350 payment on a Cherokee. I can’t move them to a $650 payment on a Grand Cherokee, so I don’t have anything to offer them,” said David Kelleher, a former Stellantis dealer council chair who owns David CDJR in Glen Mills, Pennsylvania. “We’ve had to create a process for lease buyouts because many people are buying out their leases right now due to a lack of other options.”

Source: Automotive News