Stellantis, the automaker formed through the merger of Fiat Chrysler and PSA Group, is grappling with significant setbacks as it confronts a third consecutive quarter of declining vehicle sales in the United States. Despite efforts by CEO Carlos Tavares to rectify what he has labeled as “arrogant” mistakes within the company, the latest sales figures tell a different story. In a market that remains competitive, with other automakers showing resilience, Stellantis has found itself at a challenging crossroads.
Recent reports indicated that Stellantis’ U.S. vehicle sales plummeted by 19.8% for the third quarter, totaling 305,294 units sold from July to September. This reflects an 11.5% decrease compared to the previous quarter. Industry analysts, including Cox Automotive, had anticipated Stellantis to be the weakest performer among major automakers, predicting a 21% contraction in sales. While the overall market is expected to witness a decline of around 2% compared to last year, Stellantis’ steep drop underscores critical issues that need attention.
In the midst of these disappointing sales figures, there are hints of recovery. Stellantis reported an increase in market share from 7.2% to 8% during the third quarter, alongside an 11.6% reduction in U.S. vehicle inventory. Matt Thompson, head of U.S. retail sales for Stellantis, expressed optimism about the company’s strategic initiatives geared towards improving performance and preparing for the rollout of 2025 models. However, the perception among consumers remains tentative as many Stellantis brands, with the exception of the niche Fiat, faced declining sales—with Chrysler and Dodge seeing drops exceeding 40%.
Stellantis is not just battling declining sales but also financial scrutiny. The company recently revised its profit margin forecast for 2024 downward, a move that has raised red flags among investors. Shares have taken a significant hit, plummeting 41% in 2023 and hitting a new low of $13.71—marking a 2.4% decline in a single day. This trend prompts questions about the company’s long-term positioning and ability to regain investor confidence given the current circumstances.
Tavares attributes Stellantis’ prolonged sales declines to three key factors: inadequate vehicle inventory depletion, manufacturing complications associated with two unspecified plants, and a lack of sophistication in market strategies. Since reaching a sales apex of 2.2 million vehicles in 2018, the company’s downward trajectory is alarming, especially during a period when the overall U.S. light-duty vehicle market grew by 13%.
The criticisms directed at Stellantis, particularly from labor unions and its network of U.S. dealers, have intensified as Tavares pursues profit-driven strategies at the expense of market share. The ongoing situation calls for a careful reevaluation of the company’s priorities and operational strategies. As Stellantis endeavors to reestablish its footing, it must engage constructively with all stakeholders while addressing inventory and production hurdles.
The road ahead for Stellantis is fraught with challenges that necessitate immediate and effective strategies to counteract declining sales, investor concerns, and reputation management. While the uptick in market share and reductions in unsold inventory suggest progress, the steep drop in sales casts a long shadow over the company’s future. Unless swift and decisive actions are implemented to recalibrate their approach in the competitive automotive landscape, Stellantis risks becoming increasingly marginalized. As the industry evolves and consumer preferences shift, resilience and adaptability will be crucial for the company to regain its competitive edge.