The high prices have to hurt with the higher interest rates.
They also, generally, are not fuel efficient vehicles as we’ve seen some volatility in gas/diesel prices.
Buildup of Stellantis inventories
Anyone notice that RAM, Jeep, Dodge and Chrysler have the largest inventories of vehicles.
The consensus is they have priced themselves out of the market. Any thoughts?
The consensus is they have priced themselves out of the market. Any thoughts?
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They also, generally, are not fuel efficient vehicles as we’ve seen some volatility in gas/diesel prices.
Already happeningHopefully leads to some deals happening to reduce inventory (rebates). Not great for the company, but helps the consumer. I'd like a new Mopar again soon...
They only have margins because investment in new products was extremely low and they are way behind the industry. Notice how every other automaker has a fresher lineup? Time is ticking.Stellantis has margins in n america 30% or more higher than everyone else. And a finance subsidiary, finally. Does that mean an incentive war that it can win easily enough? At gm and ford 's expense?! "Bleed'em" via rebates? Watchout gm especially ;-) their finance units have contributed 20%+- to gm and ford earnings all these post2008 years. Not so fca. But as the business and macroeconomic cycle endgame is here: watchout since stellantis has the financial er margin to bleed em dry IF they decide to go that route (outspend on rebates, higher low margin fleet sales, cheapened financing....)
When demand falls, the most stale products usually suffer first and the most.Because inventories are high....the subject of this thread.
2023 Compass with the new powertrain already has 1.9% financing, $500 cash back, and special lease deals.
$2000 cash on 2023 Wrangler 4xe already.....
Wrangler 4xe is a lot of what has been propping up Wrangler sales. Wrangler is already "old", soon to be 7 model years old.
These numbers are somewhat meaningless without knowing sales rates, but 25 mile searches for new 2023 models North Atlanta (except Renegades which are only 2022) on the Jeep website. But it looks like it is quite possible the "high margin" vehicles might be stacking up on the lots.PS - we don’t know exactly what Jeep’s mix in those 120 days supply is.
We are assuming it is Compasses and Renegades because they were showing their age the last time FCA reported sales, three months ago already. But my hunch is that we are going to see a lot of brand-spanking new, grossly overpriced Grand Cherokees and Wagoneers and yes, aging Gladiators as well.
It takes a lot of models to bring up the brand average past 120 days.
We will know more when Stellantis reports Q1 sales in another two weeks.
Wagoneer - 11
Grand Wagoneer - 6
Compass - 12
Cherokee - 22
Renegade - 3
Grand Cherokee - 463
Grand Cherokee 4xe - 46
Wrangler - 350
Wrangler 4xe - 142
Gladiator - 190
I don’t think the problem is necessarily the axle itself. It’s the implementation/integration of it into the Jeep. Heavier Jeeps with heavier tires might just need more robust suspension and steering components (with tighter quality control) than some of what was selected for JL. I’d say they over-prioritized low cost and low weight when selecting components, without the experienced players to specify what was really needed. Just a guess, and now we’ve identified two of those components: the aluminum steering box and the steering stabilizer. Oddly I’m seeing lots of posts about shock absorber failures (leaking) even on almost new JL and JT.How much more can be done? Dana has made axles for them since the beginning.
So now, besides the battery I guess I’d go to aftermarket for shocks and steering stabilizer too.
Yes, the Dana axle can fail, but it isn’t the weakest link or the cause of poor road manners IMO.
it’s a pretty localized and self-created recession then. Relying on high cost and high fuel consumption vehicles is exactly the same problem that happened to Chrysler in 1974, 1979, 2008. FCA USA has an inventory buildup most other manufacturers don’t. The warning signs are flashing again.Hey this IS the endgame ie recession(?!) They have the margins pecisely so as to get through it to victory ie FINANCIAL survival/profitability with no net debt IN and THROUGH this the economic and business cycle that began in 2008/9. It will take rebates+cost cutting+cheaper financing+inventory reduction+layoffs etc. SAME is true of every other firm...except that unlike stellantis most cannot afford to financially since.....their breakeven points are not as low BY DESIGN as stellantis'. 30-40% of sales. They'd only be dead again if they also still had say a dart chrysler 200 journey cherokee etc to support through a more or less certain and predictable sales and financial recession. Managing for survival and earnings "...in and through the cycle..." Marchionne said. Well here is the endgame of the cycle. So let's see....
The idea they can be profitable at 30% of volume is laughable. How many jobs are they going to slash? How many factories closed? I assume most people reacted at that ludicrous statement with laughter because it was that silly rather than quote it as gospel. The high fixed costs just don’t support that.
But then those who don’t understand the market will continue hanging their star on a false prophet.
Many dealers are still acting like vehicles, new and used, are in short supply. That’s changing rapidly.I don't know what others are seeing but the sales practices of 4 different Chrysler/Jeep dealers in my area with regard to late model used sales are lousy:
no negotiation on price
"discount" if you finance with them, at a too high interest rate
other addons, like "make ready fees" one dealer was adding $2500 for that
to me a lot of bait and switch going on a real turn off
I call BS. Why is it only affecting FCA USA? Think the excuses through before making them.Some of this inventory is i believe meant for pre ordered vehicles that have taken months to deliver, so the excess inventory being cited here may in fact be lower....since they under delivered vehicles last year. Regardless if this is a recession at least for car sales then another shakeout will happen just like 2008. Having loss making compact sedans etc would'v only made matters worse. Besides the whole point of the merger is geographical diversification for survival in and through usa andor europe recessions. Now if recessionary conditions become extreme like 2008+.over the next year.... :-()
How do you cut costs faster?Well tavares just said he plans on cutting costs faster than 'loss of pricing power' now underway possibly in n america....as a way of ensuring profitability and new ev investments through this potential downturn. He also said the firm was resilient in n america since it breaks even at just 40% of sales.
Stop new product development? Oh, wait that’s been the method of operation already for the last decade.
Force suppliers to deliver cheaper parts? Already doing that and that’s why Jeep batteries, shock absorbers, steering boxes, steering stabilizers are junk.
Again that profitable at 40% sure sounds like an exaggeration. If that were really the case there would not be excess inventory building up.
The longer the term of the loan, the greater the hit on affordability high interest rates become. It’s a triple curse, high prices, higher interest rates, longer terms.Ram, Dodge, Jeep & Chrysler Can't Sell ANYTHING | Big TROUBLE This video discusses the problem. 8 years loans combined with rising interest rates have have made what some thought was affordable out of reach.
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