Stellantis, owner of Jeep, is suffering

Stellantis, the automaker behind brands like Chrysler, Jeep and Fiat, is not doing well. The company faces several challenges, including falling sales, profit warnings, dealer discontent, and potential labor strikes.

Last quarter, sales tanked across Stellantis 14 car brands.

The automaker’s first-half net profits dropped by 48%. US sales during the first half fell nearly 16%, and sales between July and September plummeted 19.8% compared to a year ago. 

Stellantis expects a negative cash flow of $5.6 billion to $11.2 billion by year-end and has cut its profit margin forecast to between 5.5% and 7% instead of double digits.

Its stock price has dropped almost 50% from its high in March.

Chrysler and Dodge are the leading causes behind the dip. Last quarter, sales for both brands dropped more than 40%.

Dealers are unhappy, too
Stellantis CEO Carlos Tavares, who led the merger between PSA and Fiat Chrysler in 2021, is under pressure from dealers. In an open letter last month, dealers claimed that Tavares prioritized short-term gains over company health. 

Dealers and critics say Stellantis raised prices more than several competitors and delayed discounts. They argue the moves didn’t sit well with customers. They further claimed in the letter that Tavares set these short-term profit goals to receive a double pay raise last year, earning nearly $40 million. His contract expires in 2026.

Stellantis is also facing a looming strike by the United Auto Workers union over delayed plant reopenings.

Analysts are questioning whether Stellantis’ growth strategy has paid off, with concerns about its long-term sustainability in America.