US Markets
Wednesday, October 2nd, 2024 4:13 pm EDT
Key Points
- Stellantis U.S. sales decline: Stellantis’ U.S. new vehicle sales dropped by 19.8% in Q3 2024 compared to the same period in 2023, continuing a yearslong sales decline across all brands except Fiat.
- Challenges and strategy: CEO Carlos Tavares acknowledged “arrogant” mistakes in the company’s U.S. operations, including slow inventory reduction, manufacturing issues, and poor market strategies. Despite these challenges, the company is working to boost sales and reported a slight increase in market share from 7.2% to 8%.
- Broader issues and criticism: The company also faced a lowered profit margin forecast, a Jeep recall, and a 41% drop in stock value. Tavares’ focus on profits over market share has drawn criticism from the United Auto Workers and U.S. dealers.
Stellantis, the trans-Atlantic automaker, continues to face a decline in U.S. vehicle sales, despite efforts by CEO Carlos Tavares to correct past mistakes. In the third quarter of 2024, Stellantis reported a 19.8% drop in U.S. sales compared to the same period in 2023, selling 305,294 vehicles. This represents an 11.5% decrease from the prior quarter of 2024. Auto industry forecasts, including those from Cox Automotive, anticipated Stellantis to perform poorly, predicting a sales decline of roughly 21%. In contrast, the overall industry experienced only a slight dip, with a projected 2% decrease in sales for the quarter.
Despite the steep decline in vehicle sales across all major Stellantis brands, the company pointed to some positive trends. It cited an increase in U.S. market share from 7.2% to 8% during the quarter, as well as an 11.6% reduction in U.S. vehicle inventory. Stellantis is also preparing its dealer network for the upcoming 2025 models in hopes of turning around its fortunes. However, brands such as Chrysler, Dodge, Ram, and Jeep saw significant sales declines, with Chrysler and Dodge suffering reductions of over 40%.
Stellantis’ struggles extend beyond sales. Earlier in the week, the company lowered its 2024 profit margin forecast and recalled some Jeep plug-in hybrid electric vehicles due to fire risks. Shares of Stellantis have fallen sharply, with a 41% drop this year, reaching a 52-week low at $13.71.
Tavares acknowledged in June 2024 that Stellantis had made “arrogant” mistakes in its U.S. operations, including failing to reduce vehicle inventory, experiencing manufacturing issues, and lacking sophistication in market strategies. Since its formation through the 2021 merger of Fiat Chrysler and France’s PSA Groupe, Stellantis has focused on profit margins and vehicle pricing over market share, a strategy that has drawn criticism from both the United Auto Workers union and Stellantis’ U.S. dealers.
Stellantis’ U.S. sales have steadily declined since their peak of 2.2 million vehicles in 2018, with sales falling to 1.5 million in 2023. This stands in stark contrast to the broader U.S. light-duty vehicle market, which saw a 13% increase last year. Tavares’ cost-cutting measures have aimed to improve profitability, but the company continues to grapple with falling sales and investor concerns.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/10/02/stellantis-us-auto-sales-extend-freefall-in-third-quarter.html
