#Stellantis #AutoSalesDecline #AutomotiveIndustry
Stellantis Faces Significant Challenges as U.S. Auto Sales Plummet
Stellantis, the automaker formed by the merger of Fiat Chrysler and PSA Group, is grappling with a steep decline in U.S. auto sales. For the third quarter of 2024, the company reported sales of 305,294 vehicles, a stark 19.8% drop from the same period in 2023.
This decline is part of a larger trend for Stellantis, which has seen its U.S. sales dwindle annually since reaching a peak of 2.2 million in 2018. Last year, the company sold over 1.5 million vehicles, marking a 1% decrease from 2022, which itself had seen a 13% drop from the previous year. In contrast, the overall U.S. market for new light-duty vehicles grew by 13% last year, according to federal statistics.
The sales downturn is particularly pronounced across several of Stellantis' key brands. Chrysler and Dodge led the decline with sales reductions exceeding 40%, while the Ram truck division saw a 19% drop, and Jeep's sales decreased by about 6% year-over-year. Only the specialized Fiat division managed to avoid this downward trend.
CEO Carlos Tavares has acknowledged the need to address what he terms "arrogant" mistakes in the company's U.S. operations. These mistakes include slow inventory reduction, manufacturing challenges at two unspecified plants, and a lack of marketing sophistication. Tavares is focusing on profit maximization and cost reduction, prioritizing profitability and vehicle pricing over market share. This strategy has drawn criticism from the Auto Workers union and Stellantis' network of franchised dealers.
Despite these challenges, Stellantis is taking steps to stimulate sales and prepare for the introduction of 2025 models. The company reported an increase in market share and an 11.6% decrease in its U.S. vehicle inventory during the third quarter. "We are taking essential measures to stimulate sales and prepare our dealers and customers for the upcoming models," said Matt Thompson, head of U.S. retail sales for Stellantis.
The financial impact of these sales declines is significant. Stellantis has revised its 2024 profit margin forecast downward and faced a recall of popular plug-in hybrid electric Jeep models due to potential fire hazards. The company's shares have plummeted 41% this year on the New York Stock Exchange, hitting a new 52-week low of $13.71 on Tuesday.
As the auto industry navigates broader challenges, including overall sales declines projected by industry forecasters like Cox Automotive and Edmunds, Stellantis' struggles highlight the complexities and competitive pressures within the U.S. auto market.
Original Article:
https://www.cnbc.com/2024/10/02/stellantis-us-auto-sales-extend-freefall-in-third-quarter.html
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