Stellantis Defensive After Dealers Urgently Voice Their Concerns As Sales Tank

Prominent Jeep and Ram dealers are increasing pressure on Stellantis executives to boost sales in the United States in the wake of a substantial market-share decline.

U.S. Stellantis dealers are unhappy with the company’s ongoing market slump and maintain that CEO Carlos Tavares made “disastrous choices” that led to a significant decline in sales, as stated in a letter the dealer advisory group wrote to Tavares on Wednesday and seen by The Wall Street Journal and Bloomberg.

The auto dealers admonished Tavares to increase promotions in order to reduce excessive inventory.

Signed by four Stellantis retailers who sit on an elected advisory council, the letter was also forwarded to Stellantis Chair John Elkann, president of the holding firm of the Agnelli family of Italy, which owns a 15% in Stellantis.

Why dealers are frustrated

Dealers have good reason to be angry. Through July 1, the Journal reports that Stellantis’ U.S. market share stood at 8.5%, versus 10.4% for the same period in 2023. In particular, Jeep and Ram, the crown jewels of Stellantis’ profitability, have seen demand tank Jeep sales are down 9% for the first six months of 2024, while Ram sales plummeted 20%. It’s the clearest sign that consumers are balking at high prices and skimpy incentives, as consumers cope with high interest rates. Combined with Tavares’ reluctance to boost incentives, competitors are eating their lunch.

“Your own distribution network, your dealer body, has been left in an anemic and diminished state,” the letter states, accusing Tavares of “short-term decision making” that boosted profits and his paycheck at the expense of market share. That paycheck was a healthy €36.5 million, or $40.2 million.

The dealer council also states that it has been warning management for two years that, “Stellantis was going to be a disaster in the long run,” and that “now that disaster has arrived.”

Dealers want more incentives

While the company announced in July it was cutting 100,000 units from its manufacturing output, the affected plants are back in operation. Dealers want more cash on the hood to clear out vehicle-choked lots.

In response, Stellantis released a statement that, “We take absolute exception to the letter sent by the president of the Stellantis National Dealer Council (NDC), Kevin Farrish.”

The company states that, “August sales were up 21% over July, market share was up 0.7 points, and dealer inventory was reduced for two consecutive months by 42,000 units or approximately 10% in total.”

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Skip the “personal attacks”

Their response goes on.

“We don’t believe that public personal attacks, such as the one in the open letter from the NDC president against our CEO, are the most effective way to solve problems. We have started a path that will prove successful. We will continue to work with our dealers to avoid any public disputes that will delay our ability to deliver results.”

But the results are hard to find.

According to Cox Automotive, as of August 15, Chrysler has a 105-day supply of vehicles, Jeep 129 days and Dodge 131 days. Cox did not state Ram’s supply, stating only that it was, “well more than twice the industry average” of 68 days.