Jeep and Dodge’s parent company, Stellantis, will offer hefty discounts and reduce output as it looks to reverse plunging US sales. Stellantis warned of significantly lower profits this year as US sales fall. It’s also facing rising low-cost competition from China globally.
Jeep owner to increase discounts as US sales plunge
Following rival Volkswagen, Stellantis is the latest legacy automaker to cut financial guidance for the year.
Although Stellantis is Europe’s second best-selling auto brand, the company is falling behind in the US. It’s also facing rising competition from Chinese automakers like BYD, which are aggressively expanding overseas.
The company is working to restore normal US inventory levels. By the end of 2024, the automaker aims to have no more than 330,000 units of dealer inventory, earlier than its initial Q1 2025 deadline.
Stellantis said it would introduce significant discounts on 2024 and older model-year vehicles while slashing US output to clear excess inventory.
The company now expects an adjusted operating profit of between 5.5% and 7% in 2024, down from its prior “double-digit” guidance.
The move comes after Stellantis’ US brand sales plunged 21% in the second quarter compared to Q2 2023. Ram (-26%), Dodge (-16%), and Jeep (-9%) sold significantly fewer vehicles compared to last year.
Jeep has already slashed prices on several of its top-selling vehicles, including the Grand Cherokee, Gladiator, and Wagoneer, in an effort to boost sales. However, CEO Antonio Filosa said more could come by the end of the year.
Charging up Jeep, Dodge, Ram sales with new EVs
The price cuts come ahead of Jeep’s first global electric SUV, the Wagoneer S, which will hit US dealerships this fall. Starting at $71,995, the luxury electric SUV will play a key part in revamping sales in the US, its biggest market.
After the electric Wagoneer, Jeep will launch the Wrangler-inspired Recon EV and a new mid-size electric crossover. Stellantis also confirmed a Renegade EV, starting under $25,000, is on the way.
Jeep isn’t the only Stellantis brand going electric. Dodge and Ram will launch their first passenger EVs in the US.
The Ram 1500 REV will be built at Stellantis’ Sterling Heights Assembly Plant, its first US facility to make an all-electric vehicle. Ram’s first electric pickup is due out later this year.
Dodge opened orders for the 2024 Charger Daytona EV earlier this month, starting at $59,995. The high-performance Scat Pack model retains its status in the electric era as the “most powerful electric muscle car” with 670 hp and a 0 to 60 mph time in 3.3 secs. It costs $73,190.
Stellantis CFO Natalie Knight said reversing slumping US sales and rising inventory is the “top priority” going into the end of 2024.
Stellantis chairman John Elkann confirmed to Bloomberg News last week that Stellantis is searching for a successor to replace CEO Carlos Tavares when his contract expires in 2026.
Can electric vehicles help reverse falling Jeep, Dodge, and Ram sales in the US? Stellantis is hoping it will help build momentum. The company’s board of directors is set to meet in the US on October 9, 2024, to develop a turnaround plan.
As part of its Dare Forward 2030, Stellantis aims for 50% of US passenger and light-duty truck sales to be electric by 2030.