If you have a favorite automotive brand, there's a good chance it's made by Stellantis. Chrysler, Dodge, Fiat, Jeep and Maserati fall under the company's umbrella. But Stellantis is stumbling.
CEO Carlos Tavares resigned this month, said Fortune. Stellantis posted "record annual results" for 2023, but in September, Tavares revealed Stellantis' plans to "liquidate a bloated U.S. inventory of vehicles at bargain-basement prices." Tavares "prioritized short-term success at the cost of longer-term problems," said critics.
"All kinds of problems lurked" behind Stellantis' 2023 success, said CNBC. High prices and quality problems, notably in the ever-more-costly Jeep line, dogged the company's brands. As a result, profits "plummeted by nearly half" during the first six months of 2024, and U.S. sales fell 20% in the third quarter, though industry sales are up overall.
What did the commentators say? "What a mess it is," Gus Carlson said at The Globe and Mail. Dodge, Jeep and Ram were once "workhorse" brands, but they have increasingly "turned away loyal buyers" with "stubbornly high luxury-level prices."
Tavares was once seen as a "visionary dealmaker." But he made a misstep with a basic rule of business: "Know what value means to your customers and price your products accordingly," said Carlson. Instead, he ended his tenure in a blaze of "tone-deaf strategy and bad leadership."
The problem at Stellantis "boils down to product and price," Steven Cole Smith said at Hagerty. The company needs to find a surprise in its product pipeline to "instill confidence" and create buzz.
Chrysler has been left for dead repeatedly over the decades, only to emerge with hit products like minivans in the 1980s and the Dodge Ram pickup in the 1990s. "Each represented outside-the-box thinking," said Smith, "backed by the willingness to take chances."
What next? The dealers who sell Stellantis vehicles are "breathing a sigh of relief" at Tavares' departure, said The Detroit Free Press. And they are optimistic about the company's future. "It's like buying a house — it's got great bones," said an anonymous Michigan dealer.
But they still have to move slow-selling vehicles off their lots, and price remains an issue, meaning there's still trouble in the short term. If you are going to bet on Stellantis' future, another dealer said, "you wouldn't bet it on a $113,000 product — you would bet it on a $30,000 product." |