Stellantis To Cut 100,000 Vehicles From Inventory By 2025

In response to ongoing excess vehicle inventories, Stellantis Chief Financial Officer Natalie Knight announced plans to reduce the automaker’s inventory by 100,000 units by the beginning of 2025. This strategic move comes as Stellantis aims to better align itself in a challenging automotive market while still pursuing ambitious profit goals.

During a recent conference call with Bank of America analysts for the 2024 European Autos and Future Car Virtual Conference, Knight emphasized the importance of this initiative, stating, “I just want to make really clear that from my point of view, if we have to make a trade-off, getting ourselves clean for ‘25 is definitely going to be our top priority.”

At the midpoint of 2024, Stellantis reported having more than 430,000 vehicles in the United States, which was deemed excessive given the current market conditions. Knight highlighted the progress made in reducing this number, noting, “I think we’re off to a solid start. We’ve taken it down by 40,000 in the months of July and August. We’re going to continue to see reductions in September and throughout the year.”

Despite these reductions, Stellantis faces several challenges, including declining sales and profits. Knight’s remarks come amid criticisms from U.S. dealers and the United Auto Workers (UAW). Recently, a group of dealers sent a letter to Stellantis CEO Carlos Tavares, expressing concerns over what they termed “reckless short-term decision-making” aimed at securing record profits.

In August, Knight pointed out that while the company had experienced a rough July, improvements were seen the following month. “July was a very poor month, so, hopefully, that was the trough, and now you’re seeing the movement up,” she stated, adding that August sales were up 21% over July. Despite this positive shift, she cautioned that Stellantis is not yet “out of the woods.”

Knight also confirmed that Stellantis made the tough decision to cut production by more than 100,000 vehicles in the third quarter. Additionally, the company has lowered prices on some newer models and is exploring consumer incentives to boost sales.

When asked about Stellantis’ stock value, Knight expressed optimism, saying, “We’re one of the largest companies, we’ve got a great power play of products coming out if you look at the next 12 months and the commercial value of it, and we’re probably the most undervalued in the sector.” As of Monday, Stellantis shares were trading at $15.36, a significant decrease from earlier highs of $29.40 this year.

Source: Detroit Free Press