Looking Grim(er) For Stellantis

[Ratbert]

About to get interesting. I think the election (no politics in this post or response please) will decide which direction most will go on their next vehicle purchase. Food or Jeep. About to get real interesting which next direction we vote to go.

You make a political post, then ask for no political replies? That's, uhhhhh, "interesting".

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[John VonJeep]

You make a political post, then ask for no political replies? That's, uhhhhh, "interesting".

Mods right now

 

[Mocopo]

You make a political post, then ask for no political replies? That's, uhhhhh, "interesting".

Well, without advocating for one political outcome over another, it is very true that the election will impact EV mandates, energy production, and global trade agreements, all of which will impact the auto industry. I believe that January 2025 will see some significant decisions made by all major manufacturers. It will be interesting to see if Stellantis lightens their EV push if the election goes that way, or if they have decided to be all in on EV regardless of American politics. Their track record of late would suggest they won't care, and they'll make the wrong choice either way...

 

[GinaC]

Anyone buying a vehicle right now must either be desperate, delusional or is financially foolish.

Well bless your heart.

 

[blackwater]

Saw this fascinating article in the Wall Street Journal on Stellantis' decision to cut Wrangler and Grand Cherokee production in response to growing dealer inventories; something many on these forums have discussed. WSJ cites Jeep and Dodge as having a 4 month supply on dealer lots compared to industry average of 68 days.

"Factories temporarily stopped producing the Jeep Wrangler and Grand Cherokee sport-utility vehicles in the past week, people familiar with the matter said. Those models were among Jeep’s bestsellers through the first half of the year.

In a statement, Jeep’s parent, Stellantis, late Wednesday confirmed “production adjustments” at two Detroit assembly plants that make the Grand Cherokee, and another factory in Toledo, Ohio, where the Wrangler is produced. How many days the facilities have been idled couldn’t be determined.

The production cuts come as Stellantis grapples with some of the industry’s highest inventory levels and as sales have sagged, triggering complaints from dealers."

"For months, dealers and Wall Street analysts have blamed Stellantis’s bloated stocks on higher prices and fewer promotions than from rivals."

"Stellantis’s vehicle sales in the U.S. were down 21% through the first six months of the year, compared with a small increase in the broader auto industry."

https://www.wsj.com/business/autos/...ers-grand-cherokees-77b373c0?mod=hp_lead_pos5

Like I mentioned in a previous post, at the end of August I bought a new 2 door X for $16k below MSRP. That included a 2k rebate, 1k coupon from the Jeep website and T/L. The day prior I was at the same dealership and said I will wait until Labor Day sales hit. That night, the GM called me and said if I bought the vehicle and a larger rebate hit Labor Day, he would honor it. Lucky I bit because Jeep DROPPED the 2k rebate September 3rd. It makes no sense! A ton of vehicles are on the lot. Regardless the people screaming for price reductions do not see reality. Just like home builders cannot build a house for the same amount they did three years ago, car manufacturers cannot build a car for the same as they did three years ago. The sticker articulated over an $1800 destination charge for a 2 door Jeep. I just paid $54 to have a 3’x3’ dog crate pad shipped to Idaho from Ohio. Most of the parts needed to make a vehicle are shipped to the factory. The UAW recently scored a huge pay raise, some states have a minimum wage of over $16 per hour, not too long ago I paid $1.89 for premium gasoline. Something is going to break!

 

[John VonJeep]

Well bless your heart.

Right? It never occurs to him that people might be getting five-figure discounts and paying cash.

 

[Blues Fan 30]

For having all this excess inventory it's pretty wild there isn't a single hydro blue sahara with 2.0 gas engine, leather, sot, and premium audio within 300 miles of me that I can find. Theres only a couple with the 3.6 but theyre more expensive plus I keep seeing issues with the 3.6 so why spend more money for it?Perhaps the real issue is they're forcing unwanted trims and packages on dealers?

Aside from that, they need to offer a lengthier finance deal. 36 months is a JOKE!

 

[dsgrey]

Stellantis is not alone in having excess inventory.

Just about every automaker misinterpreted used vehicle prices as an indicator of pent up demand arising from the supplier shortages a few years back so they overestimated the market.

On top of the insane inflation, add in the high interest rates to the cost of these vehicles built on overtime plus the high cost of freight and you wind up with this mess.

Anyone buying a vehicle right now must either be desperate, delusional or is financially foolish.

TLDR: Inventories are fat because it’s not a good time to purchase/finance anything of significance.

Quality is a concern too, especially at today's inflated prices. Son-in-law which fits the financially foolish category needs a new pickup soon and asked me about brands. Quality issues seem to be increasing in all brands including Toyota.

 

[CT_LFC]

Well, without advocating for one political outcome over another, it is very true that the election will impact EV mandates, energy production, and global trade agreements, all of which will impact the auto industry. I believe that January 2025 will see some significant decisions made by all major manufacturers. It will be interesting to see if Stellantis lightens their EV push if the election goes that way, or if they have decided to be all in on EV regardless of American politics. Their track record of late would suggest they won't care, and they'll make the wrong choice either way...

While i agree that the election will have an impact, it probably will take some time for companies to feel the effect, while Stellantis’ problems are in the now.

 

[Whiskey Tango Foxtrot]

We're on our second 2024 Grand Cherokee Summit after Stellantis replaced the first one for electrical problems. The second one now locks out the ignition for 30 minutes at a time, randomly stranding us. Pretty sure this will be our last GC. So kind of glad they're not making as many, as they still don't know how to build them.

 

[Mocopo]

While i agree that the election will have an impact, it probably will take some time for companies to feel the effect, while Stellantis’ problems are in the now.

Well, I'm assuming the companies won't wait to feel any impact before they make certain manufacturing decisions. Using EVs as an example, we know that one political party will continue pushing EV mandates, whereas the other will roll many of those mandates back and even reduce regulations on ICE vehicles. This includes dealership incentives for stocking high numbers of EVs on lots, or tax breaks and subsidies for EV sales, which can directly translate to rebates for customers. It's no wonder the 3.6l is so expensive right now, there are no subsidies for selling those vehicles. These things will (or at least should) directly impact pricing and production focus, and plans to shift fire can be put in place by manufacturers literally on November 6.

That said, you're correct, Stellantis's problems are now, and I'll reiterate that I believe it doesn't matter, Stellantis will make the decision that upsets it's customer base but keeps the shareholders happy. Maybe this is just me, but I feel like almost any large company, especially those in manufacturing, are following this same trend.

 

[CT_LFC]

That said, you're correct, Stellantis's problems are now, and I'll reiterate that I believe it doesn't matter, Stellantis will make the decision that upsets it's customer base but keeps the shareholders happy. Maybe this is just me, but I feel like almost any large company, especially those in manufacturing, are following this same trend.

there’s no such thing as upsetting customers and making shareholders happy. Without customers there is no company and no stock.
STLA is down 30% YTD which is terrible on its own but even worse when the market (SP500) has gone up 15% over the same period.

 

[alphawolff]

Start doing large rebates to reduce current inventories. For 2025 make the 3.0 S/O Hurricane a option for the 2025 JL/JT/WL platforms to attract buyers to those models.

I know we want new engine options, but I'm telling you right now stuffing that 3.0 into our engine bays will be an absolute nightmare. Every single repair would become a cab off job.

 

[alphawolff]

TLDR: Inventories are fat because it’s not a good time to purchase/finance anything of significance.

While true, this isn't even remotely the case. Sure, prices are high but that's never stopped people before when it comes to Jeeps. It's the same as the premium people pay for Toyotas. The difference is the people who did purchase one are having such extreme quality/reliability issues that word starts getting around and people stop buying them. You think a 4XE owner thats had their jeep in the shop every other month for 3 years is going to buy another jeep product? Hell no.


Insanely high price + dogshit reliability = dead sales.

Wrangler owners in general look for a reliable, durable, and capable vehicle. That's the entire idea behind the model.

 

[Wbino]

Well, without advocating for one political outcome over another, it is very true that the election will impact EV mandates, energy production, and global trade agreements, all of which will impact the auto industry. I believe that January 2025 will see some significant decisions made by all major manufacturers. It will be interesting to see if Stellantis lightens their EV push if the election goes that way, or if they have decided to be all in on EV regardless of American politics. Their track record of late would suggest they won't care, and they'll make the wrong choice either way...

I thought the market decided?

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