Stellantis (STLA) , the parent company behind well-known American nameplates like Jeep, Dodge, Chrysler, and Ram Trucks, has been through the absolute thick of it over the past few months.
Since the huge automaker’s first-half earnings in July gave it a wake-up call, it enacted cost-cutting measures that included offering white-collar employees voluntary buyouts and cutting factory workers and shifts to tackle its massive inventory problems, which disgruntled U.S. dealers raised.
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At the same time, the automaker responsible for 14 global brands also faced huge C-suite changes, as well as pressure from the United Auto Workers union that got the attention of prominent lawmakers on Capitol Hill, including prominent Democrats like Senate Majority Leader Chuck Schumer (D-NY).
New reports of Stellantis’s Q3 2024 performance still indicate that the storm has not past yet, but the company’s troubles may present a valuable opportunity for buyers looking to get a new Jeep or Dodge.
A Jeep Grand Cherokee L goes through assembly at the Stellantis Detroit Assembly Complex-Mack in Detroit, Michigan.
Bill Pugliano/Getty Images
Stellantis reports poor Q3 sales performance, revenue
On October 31, Stellantis revealed that it experienced a slip in sales and revenue that is not contained in its North American and European markets, but found in nearly every region in which it sells vehicles.
During the third quarter of this year, the automaker reported global revenues of $36 billion (or €33 billion), a 27% drop compared to the same period last year.
In terms of sales, worldwide sales of new cars fell 20% compared to last year, from 1,427,000 to just 1,148,000. The worst drop occurred in North America, where sales dropped by 36%, from about 470,000 to just 299,000 cars.
Across the pond in Europe, double-digit losses were also reported, where its performance of selling 496,000 cars represented a 17% loss. Additionally, sales in Middle East and Africa faced a 26% drop and sales in China, India and Asia-Pacific fell by 30%.
“While Q3 2024 performance is below our potential, I’m pleased with our progress addressing operational issues, in particular U.S. inventories, which have been reduced meaningfully and are on track for year-end targets, as well as stabilization of U.S. market share,” Stellantis CFO Doug Ostermann said in a release.
Related: Jeep, Dodge factory workers are newest victim of Stellantis cuts
Solving inventory woes while introducing new cars is a challenge.
In a conference call with analysts, the automaker’s newly appointed CFO, Doug Ostermann, pointed out that the company is making progress in solving its excess inventory crisis.
The automaker aims to reduce its excess inventory on dealer lots by 100,000 units, from more than 430,000 cars reported in June to 330,000 by the end of 2024. However, Ostermann said it could reach its target even sooner, by November.
“We’re making consistent progress reducing the stock levels in the U.S.,” Ostermann told analysts. He also noted that lowered inventory levels helps dealers become “more profitable partners and better able to support the launch of exciting new products.”
Stellantis wants to roll out an array of new cars into dealerships, including the Dodge Charger Daytona, Jeep Wagoneer S, and Ram 1500 REV EVs, as well as the Ram 1500 Ramcharger range-extended pickup.
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But to make room for these new models, Ostermann still has to move the vehicles already on dealer lots. Some dealers complain that the excess of “old” products makes it hard to sell and order new ones from the factory.
“It’s hard to order 2025s when you’ve got a lot full of 2023s and ’24s,” Tennessee-based Stellantis brand dealer Doug Wilson told Automotive News. “There may not be hundreds of thousands of 2023s still in dealer stock, but it’s more psychological.”
Ostemann told analysts that he and the company are actively helping massage its excess inventory out, directly working with dealers to determine the best approach to selling cars to the buying public and getting bodies into showrooms.
“We’ve engaged in a very fundamental review of the entire go-to-market approach,” Ostemann said, “and identified ways to improve our performance at the top of what we refer to as the purchase funnel in terms of ensuring we have a healthy share of voice; at the middle of the funnel, where we identify and progress qualified leads with our dealers; and at the bottom of the funnel, where the right pricing and incentives maximize conversion to sales.”
Related: Dodge has a huge problem on its hands (and it’s growing)
Benefits for potential Stellantis customers
The new Stellantis CFO said that the automaker has been offering more “customer-facing” incentives and discounts on key models to help move inventory, which is currently reflected on the customer end.
The urge to move excess 2024 model-year cars is currently reflected on multiple Stellantis brand websites.
For instance, at the time of writing, select 2024 model-year Jeep Compass and Wranglers are being offered with a $3,000 discount, select 2024 Grand Cherokees are being offered with a $6,000 discount, and the price of the 2024 Wrangler-based Gladiator pickup has been lowered 10% from $37,895 to $34,106. At the same time, similar incentives are displayed on the sites of Dodge, Ram Trucks, and Chrysler.
Stellantis NV trades on the New York Stock Exchange as STLA and is up 1.06% from the opening bell, trading at $13.76 per share at the time of writing.
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