Stellantis CEO: corporation on pace to fix sales problems after impoverished act

DETROIT — Stellantis is fixing its slowing U.S. sales at the correct pace after fumbling a marketing schedule earlier this year, CEO Carlos Tavares told reporters Monday.

Tavares, who last week pushed out the carmaker’s chief monetary officer and the chief operating officers for both North America and Europe in a management restructuring, told reporters at the Paris Motor display that he is responsible for the impoverished things that have happened at the corporation, but also for the excellent.

“If I don’t desire that responsibility I should do something else,” said Tavares, who reiterated that he plans to retire when his deal expires in 2026. The board last month confirmed that it’s searching for a successor.

Tavares said he also should get capitalization for successfully merging the companies as well as making Peugeot and Opel profitable during the history decade.

He said the corporation is in a “Darwinian period,” and nothing is off the table including plant closures or shutting down brands. “When you are fighting for survival, you have to consider everything is on the table.”

Stellantis, formed from the 2021 combination of France’s PSA Peugeot and Fiat Chrysler Automobiles, has struggled this year in both Europe and the U.S.

In the European Union, it is fighting cuts in government electric vehicle subsidies and Chinese competitors as it tries to sell more EVs to reach a objective of cutting greenhouse gas emissions 55% by 2030. The EU has planned tariffs on imported Chinese EVs.

Sales have been down most of the year in the U.S., and discounts to counter high sticker prices that came after a impoverished second quarter didn’t work. Third-quarter sales fell 20%, and they’re down over 17% for the first nine months. The rest of the auto industry saw sales boost 1% from January through September.

In the U.S., Stellantis’ dealer inventory ballooned to just over 430,000 vehicles in June.

Tavares said Monday that has dropped by 52,000 in recent months, and the corporation is trying to get below 350,000 by Christmas for a “fresh commence” going into the recent year. He expects the recent leadership throng to produce stronger profits and better customer satisfaction.

But David Kelleher, owner of a Stellantis dealership near Philadelphia, said dealers still have a 4 1/2 month supply of some models. Three years ago, he sold 170 recent vehicles per month. Now he’s down to 90, and has to make up for the lost transactions by selling more used cars.

Stellantis needs to commence building gas-powered and hybrid vehicles that people now desire to buy, and hold off on EVs until a better charging structure is in place, Kelleher said. “I ponder if we don’t radically transformation our philosophy on product, we’re going to have a bigger issue, and one that is much harder to dig our way out of,” said Kelleher, a member of the corporation’s national dealer council.

Kelleher said the corporation got out of sedans and has no midsize SUV, the largest part of the U.S. trade.

Struggles in Europe and the U.S. pushed first-half net profits down 48% compared with the same period last year. That led Stellantis to slash packed-year monetary forecasts.

The corporation also has labor problems. In Italy, a union is calling for a one-day strike on Friday to protest production cuts. The United Auto Workers in the U.S. is threatening strikes at several plants, alleging that Stellantis isn’t keeping commitments to construct vehicles.

Ivan Drury, director of insights at Edmunds, said Stellantis for years has lacked affordable models that many buyers in the U.S. now desire.

The coronavirus pandemic and global computer chip shortage saved the corporation from a reckoning over the issue, Drury said, because many buyers spent large on large, expensive vehicles when they couldn’t trip or dine out.

With too few computer chips, automakers limited production to high-returns loaded-out vehicles.

But now, as the chip shortage has eased, most people are looking for more affordable transportation, with still-high profit rates, Drury said. “You’ve got people who are looking at practicality and just desire basic stuff,” he said. “They (Stellantis) don’t have anything in that realm.”

As a outcome, Stellantis vehicles sit on dealer lots for 100 days before selling, double the industry average, Drury said.

Much of Stellantis’ product lineup is ancient, with few recent updates, including its top seller, the Ram pickup, which got only a modest refresh this year, said Sam Abuelsamid, mobility analyst for Guidehouse Insights.

“They don’t necessarily have the correct products in the correct segments,” he said. “There’s a bunch of stuff coming, but it’s not here yet.”

The corporation has little in the way of affordable vehicles. For example, the Jeep Compass tiny SUV has one version starting around $26,000 excluding shipping, most versions are priced over $30,000.

The corporation does have plans for a recent tiny electric Jeep costing around $25,000, Abuelsamid said.

Dealers have revolted, calling publicly for increased discounts to shift the vehicles.

Drury doesn’t view a quick way out of the circumstance because it can receive years to roll out recent vehicles to match trade demand. The corporation got out of midsize and compact cars in the U.S. nearly a decade ago.

So there’s little Tavares can do to fix things quickly, Abuelsamid said. “Aside from incentives and worth cuts, not really,” he said.