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Buildup of Stellantis inventories

8K views 84 replies 25 participants last post by  plymouth1 
#1 ·
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?
 
#7 ·
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....)
 
#10 ·
My Fiat Spider turned 4 years old yesterday. This is the longest I have held onto a car since I graduated college.

But I am in no rush to buy anything. Between insane prices, crummy dealers, high interest rates, and low miles on both my vehicles due to Work From Home, I can sit and wait....
 
#24 ·
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.
 
#25 ·
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.
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.
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
 
#30 ·
I am afraid that would be the home stretch of Norm’s famous Jeep going a slippery slope.

What Jeep ought to do, like Porsche did with 911’s rear engine, is stick to its guns, and take the development of the front solid axle to higher levels of refinement and capability.
 
#35 ·
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....
 
#37 ·
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.
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.
 
#38 ·
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
 
#42 ·
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.... :-()
 
#51 ·
If thats true, then he has really no idea what's been happening at Mopar since the Daimler invasion. What's left to cut? One assembly plant? Check. Suppliers profits? Already did that several times in the last 20 plus years. Warranty cuts? Well they have been trying very hard to not own.up to the cheap parts they've been using, so check. Engineers to help engineer vehicles? Yep Ford seems to have gotten all of them, but Ford's build quality has went in the toilet, so there is that. I'm sure they will find other ways to cut. Oh, don't rule out pushing back the new products timeline either.
 
#55 ·
It used to be that a 60 day inventory was an ideal balance between the makers and the customers. For sure (duh !) 90+ day inventory means people don't want what you are offering, you have to offer rebates, low interest financing to try to get the cash you need. 40 days or less means people want your product and no need for incentives. The high inventory levels have come for many brands due to high interest rates and prices, greed by dealers for too long (especially with the pandemic), some vehicles able with reasonable maintenance lasting well over !00,000 Miles, many taking out longer term loans (72+ months) so are not buying as often. For some brands, they have under-invested in new versions, many vehicles in the recent past including 'Mopars', have had serious component issues (engines, transmissions, electrical), developing reputations that are killing their brands. If people are going to buy a new car, it will be the Japanese based brands as perceived and actually practically reliable, better designed and engineered.
 
#65 ·
Speaking of Jeep, there are unofficial reports floating around that Wrangler’s long-awaited mid-cycle redesign opened for ordering three days ago as a 2024 model year.

Dealers were invited to an online internal presentation outlining all the changes to JL, but there has been no public announcement, no press release, no published photos, no reveal for youtubers, no official list of changes, nothing. Dealers are having to describe prospective buyers what this mythical redesigned 2024 Wrangler looks like using their hands.

After years of Wrangler customers waiting for a redesign, dealers are now in the strange position of waiting for customers to come in to place their orders...and waiting, and waiting...

The whole thing is just so bizarre.
 
#66 ·
I’m guessing the reveal is at Easter Jeep Safari, but I haven’t heard anything about the refresh actually addressing the mechanical issues of JL.
 
#80 ·
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