The French-Italian car giant Stellantis sees sales in the USA falling by a fifth

Stellantis delivered 305,294 vehicles in the third quarter, a significant 19.8% decline compared to the same period last year, marking the fifth consecutive quarterly sales decline in the United States.

The automaker is expected to report a 21% overall sales decline over the past three months, according to auto industry researcher Cox.

The quarterly sales report followed a forecast downgrade earlier in the week as the Franco-Italian automaker revised its full-year 2024 outlook.

Stellantis attributed the downgrade to decisions aimed at significantly addressing performance issues in North America, as well as worsening global industry conditions.

Stellantis, which includes well-known brands such as Jeep, Ram, Chrysler, Dodge, Alfa Romeo and Fiat, reported third-quarter sales declines at five of its top six brands.

Compared to the same period last year, sales of Jeep, Ram, Chrysler, Dodge and Alfa Romeo fell 6%, 19%, 47%, 43% and 29%, respectively.

Fiat was the only brand to see a slight increase, with 316 vehicles sold in the US.

High inventory levels

A lack of incentives, high vehicle prices, weaker demand and intensifying competition have contributed to Stellantis’ inventory surge.

According to a May Cox report, some of the company’s best-selling brands, such as Dodge and Jeep, now have inventory levels of 149 and 122 days, nearly double the industry average of 76 days.

Matt Thompson, head of U.S. retail sales at Stellantis, said in a press release: “At the start of the third quarter, we rolled out an aggressive incentive program across our U.S. brand portfolio. This, combined with significant competitive updates in August and September, resulted in a reduction in dealer inventory of over 50,000 units by the end of the quarter, a decline of 11.6%.”

He added: “These cross-brand incentives, which will continue through the end of the year, also helped deliver continued overall monthly growth in stocks in the third quarter, from 7.2% in July to 8% in September.”

“We continue to take the necessary actions to drive sales and prepare our dealer network and consumers for the introduction of the 2025 models.”

Cost reduction and downgrading of guidelines

Given the continued decline in sales and production challenges, Stellantis has cut costs by reducing its workforce in the U.S. and Europe.

CEO Carlos Tavares, speaking at the company’s North American headquarters, announced that the company has achieved cost savings of 8.4 billion euros since the merger of Fiat Chrysler and PSA Groupe in 2021.

The company has laid out a strategic plan to grow revenue to $300 billion by 2030.

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The company has also lowered its outlook for industry free cash flow and now forecasts a range between -5 billion and -10 billion euros, compared to the previous estimate of “positive”.

Stellantis shares fall to a near two-year low

Stellantis shares, which hit an all-time high of over €27 in March, have since plunged 90% to close on Wednesday at €12.41, their lowest level since October 2022. Stellantis is now among the top 10 worst performers in the Euro Stoxx 600 Index, with a price decline of 41% this year.

In the first half of 2024, the automaker reported net sales of 85 billion euros, down 14% year-on-year, and net profit of 5.6 billion euros, down 48% year-on-year. Stellantis is scheduled to report its third-quarter shipments and sales results on October 31, a key event that will likely impact the company’s future stock performance.

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