Stellantis, the world’s fourth-largest car manufacturer, is in a tailspin in the United States as its sales plunge by 16% in the first half of 2024. The company’s American brands are taking a massive hit, with Jeep down by 9%, Ram suffering a staggering 26% drop, Chrysler off by 8%, and Dodge falling by 16%. The dismal sales have led to a growing inventory glut, forcing Stellantis to scramble to unload unsold vehicles by slashing prices and offering bigger discounts.
The company initially planned to limit its US inventory to 330,000 vehicles by early 2025, but now, in an act of desperation, Stellantis aims to reach that target by the end of this year. To make matters worse, they plan to ship 200,000 fewer cars to US dealers in the second half of 2024 than they did in the same period in 2023—double the reduction they initially projected.
What’s behind the downturn? Stellantis blames a “deterioration in the global industry backdrop” and admits it’s struggling to fend off increasing competition from Chinese automakers. However, poor performance across its major US brands raises deeper questions about the company’s long-term strategy.
The numbers tell a grim story. Alfa Romeo’s Giulia has the unenviable distinction of being the slowest-selling car in the US, languishing in dealerships for an average of 617 days. The Stelvio and Fiat 500e are not far behind, stuck in inventory for over 450 days each. Meanwhile, discontinued models like the Jeep Renegade and newer releases like the Dodge Hornet are also gathering dust.
This glut of unsold cars has led to a sharp downgrade in Stellantis’ financial outlook for 2024. The company has slashed its projected operating income margin from double digits to a meager 5.5% to 7%, with North America bearing the brunt of the damage. What was once anticipated as positive cash flow has now turned into a potential disaster, with estimates ranging from -€5 billion to -€10 billion.
The crisis has sparked an open rebellion among Stellantis’ US dealers. The Stellantis National Dealer Council penned a scathing letter to CEO Carlos Tavares, accusing him of steering the company towards a “disaster” and laying the blame for the “rapid degradation” of Jeep, Ram, Dodge, and Chrysler directly at his feet.
With Tavares’ contract set to expire in January 2026, Stellantis is already searching for his replacement, though company officials claim this is just part of a normal process. Despite the growing unrest, Tavares may yet stay on beyond his current five-year term. However, as the situation spirals, both investors and employees are left wondering whether Stellantis can right the ship—or if it’s headed toward a breaking point.
With dealers drowning in excess inventory and the company’s finances sinking fast, Stellantis’ future looks uncertain. The pressure is mounting on Tavares and his team to pull off a turnaround, but the odds are stacked against them as competitors close in.
