Stellantis Reports $1.8 Billion Loss in North America: Implications for Dealers
Stellantis, a multinational automotive manufacturer that builds and distributes the Chrysler, Dodge, Jeep, Ram, Fiat and Alfa Romeo brands in the United States, reported a staggering $1.8 billion loss in North America for the second half of 2024. This significant financial setback has raised concerns across the automotive industry, particularly among Stellantis dealers that rely on the manufacturer’s financial stability and success.
Stellantis attributed the loss to several factors, including a substantial drop in revenue due to discounts aimed at reducing high levels of unsold vehicle inventory. This stems from a recent push to move Stellantis brands like Jeep upmarket, with increased prices. Its revenue fell by 38% in the second half of the year, forcing Stellantis to abandon its prior profitability goals. This loss comes at a time when automotive sales across the industry have softened, with some manufacturers, including Stellantis, struggling more than others.
The Dealership Attorney’s Takeaway:
Stellantis’s financial woes will likely put additional pressure on the company and its dealers alike to improve their financials, turn around lagging sales, and reduce inventory levels. Dealerships may need to make operational changes to adapt to worsening market conditions, including reevaluating staffing levels, marketing strategies, and other expenses. Dealers will also need to remain vigilant that shortcuts aren’t taken with advertising and sales practices and that they remain compliant with applicable laws regarding advertising and selling vehicles. Moreover, Stellantis may pressure dealers to take additional inventory or may offer special incentives to some, but not all dealers. Either way, dealers will need to plan accordingly and prepare themselves for what could be a long period of declining sales and profits.