Stellantis fires back at furious dealers who blame CEO for ‘Devastating Collapse'

Introduction

Stellantis, the parent company of iconic automotive brands including Jeep, Chrysler, Ram, Fiat, Alfa Romeo, Maserati, and Citroën, is facing significant internal turmoil, akin to a civil war, as its largest dealer group publicly criticizes the leadership for a steep decline in performance. A stern letter from the Stellantis National Dealer Council in the U.S. accused the company of "rapid degradation" of its American brands and labeled the current state "devastating."

Falling sales and production issues have plagued Stellantis, coupled with an alarming oversupply of vehicles sitting on dealer lots and numerous recalls. The frequency of Jeep recalls has led to dealer frustration, with some questioning the effectiveness of the current leadership and its strategies. The dealers called out Stellantis CEO Carlos Tavares for earning nearly $ 40 million in 2023 while the company struggles, attributing the ongoing issues to “reckless short-term decision-making” aimed merely at securing record profits.

In a defensive response, Stellantis dismissed the dealers’ claims, pointing to a 21% sales increase in August 2024 and a market share improvement. However, these statistics are juxtaposed against the reality that Jeep sales have declined for four consecutive years. While the company celebrates a reduction in dealer inventory, many of its dealerships are still facing difficulties, with some on the brink of bankruptcy.

The dealers argue that Stellantis is taking drastic actions, such as discontinuing popular models like the Ram 1500 and Jeep Grand Cherokee, while failing to build vehicles that are both desirable and affordable. The $ 77,000 starting price of the new Wagoneer highlights a troubling trend: higher average transaction prices, which have risen from under $ 40,000 to approximately $ 57,000 for Jeeps.

Sales figures tell a grim story. In Australia, Jeep sales have plummeted from 20,000 units in 2014 to just 1,661 this year. Similar downward trends are seen in other Stellantis brands, such as Fiat and Alfa Romeo. Furthermore, Jeep has declared bankruptcy in China, where it once thrived, leaving Ram as the company’s most successful brand, albeit through a third-party importer rather than direct sales.

Stellantis made headlines recently when it refuted rumors of selling Maserati after being pressured by the Italian government to fulfill contractual obligations to invest in battery production. The government, dissatisfied with Stellantis's inaction despite receiving $ 400 million, is demanding either return of the funds or fulfillment of the investment agreement.

Looking ahead, Stellantis plans to introduce Leap Motor, a Chinese EV brand, as a strategy to counter emerging car brands in the market. However, the reception of this lesser-known entity outside of China remains uncertain. While Stellantis may maintain brand loyalty for Jeep and Ram in the U.S., its performance outside of America raises concerns about the company’s future viability.

Keywords

• Stellantis
• Civil War
• Dealers
• Carlos Tavares
• Reckless decision-making
• Jeep
• Sales decline
• Chrysler
• Ram
• Production issues
• Maserati
• Leap Motor

FAQ

Q1: What are the main issues Stellantis is facing with its dealer groups?
A1: Stellantis is experiencing significant declines in sales, production issues, oversupply of vehicles, and frequent recalls.

Q2: How has CEO Carlos Tavares’s compensation been received by dealers?
A2: Dealers have criticized Tavares for earning $ 40 million in 2023 amidst the company's struggles, calling it reckless short-term decision-making focused on securing profits.

Q3: What specific actions has Stellantis taken that have angered dealers?
A3: Dealers are particularly upset about the discontinuation of popular models like the Ram 1500 and Jeep Grand Cherokee, with calls for Stellantis to build more desirable and affordable vehicles.

Q4: How have Stellantis’s sales trends looked in comparison to previous years?
A4: Stellantis has seen a significant drop in sales for several of its brands, especially in Australia, where Jeep sales fell dramatically.

Q5: What is Stellantis’s plan for the future in terms of new brands?
A5: Stellantis is set to introduce Leap Motor, a Chinese EV brand, aimed at competing with emerging car brands in the global market.