Cox Automotive’s Q1 2023 analysis of Stellantis US sales makes uncomfortable reading for the company. Sales for Jeep, Dodge, Ram, Chrysler, and the other brands under the Stellantis umbrella were soft, with inventory levels building at dealerships as wholesale shipments continued flowing into a market where retail sales weren’t keeping pace. In the US — the most important market for the company’s most profitable brands — shoppers were harder to convert than the prior few quarters suggested.
The inventory buildup is the most immediate concern. When dealer lots fill up with vehicles that aren’t selling at the pace they’re arriving, the pressure to use incentives to clear the backlog builds. Stellantis under Carlos Tavares has been famously disciplined about avoiding the margin-killing incentive wars that plagued American automakers in previous generations. Maintaining that discipline while inventory builds requires accepting lower volume — a choice that has financial consequences of its own.
The specific brands facing challenges tell a story. Jeep, while still a strong brand globally, has seen its US competitive environment get more crowded as Ford Bronco, GM’s refreshed SUV lineup, and various Korean entries have given buyers more alternatives in the capable off-road and lifestyle SUV categories that Jeep has long owned. Ram trucks face the perennial competition from F-150 and Silverado. Dodge is navigating its own identity crisis with the muscle car lineup winding down and the Hornet crossover a partial placeholder.
The Q1 softness doesn’t mean Stellantis is in crisis. The company’s European operations and its discipline on pricing and cost management have generated strong profitability in recent periods. One quarter of soft US volume is a data point, not a trend — but it’s a data point that the market and investors are watching carefully given the inventory levels attached to it.
For buyers of Stellantis vehicles, improving inventory levels mean improving negotiating position. The above-MSRP era for Jeeps and Rams appears to be fading, and buyers willing to be patient and selective should find the market more favorable in 2023 than it was during the shortage years.
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