Cox Automotive Analysis: Stellantis’ market performance in Q3 2023

Stellantis reports global deliveries and revenue on October 31 but not its earnings. Earnings reports only every six months. However, Stellantis will be questioned by analysts about the impact of the UAW strike on its revenues and profits, which will take the biggest hit in the fourth quarter.

The UAW went on strike against General Motors, Ford, and Stellantis on September 15, initially destroying one assembly plant for each automaker. As for Stellantis, the Toledo, Ohio, plant that makes the Jeep Wrangler and Gladiator is on strike. Since then, the UAW has added Stellantis’s most profitable plant as a target for the attack, the Michigan plant that makes the Ram 1500 pickup truck. The plant employs 6,800 workers, accounting for 28% of Stellantis’ sales in North America.

Wall Street analysts say the loss of the plant to the strike could cost Stellantis up to $400 million in revenue and up to $80 million in additional earnings before interest and taxes. Actual losses will be revealed after the fourth quarter.

On Saturday, the UAW reached a tentative agreement with Stellantis. In addition to terms similar to the Ford contract, including a 25% wage increase, Stellantis agreed to reopen the Belvedere, Illinois, plant, which had been idled indefinitely due to slow sales of the Jeep Cherokee made there, angering the union. With the help of funding from the state of Illinois, the Belvedere plant will build electric vehicles and batteries for electric vehicles, creating 2,000 to 3,000 jobs. Stellantis has committed $19 billion in new US investments. Employees will return to work during the certification process.

In the third quarter, Stellantis fell back into declining sales after fighting its way out in the second quarter. Sales fell 2% when the market rose 16%, continuing to erode market share. Worse still, the volume brands that make Stellantis money, like Jeep and Ram, have declined in sales and market share.

Like most automakers, Stellantis increased incentives in the third quarter. Ram had the highest incentives. Jeep received the largest percentage increase in incentives compared to the previous year. Like other automakers, Stellantis’ growth in average transaction prices has slowed.

The United States and Europe are Stellantis’ most important markets. Here are some data points from Cox Automotive on Stellantis’ US market performance in the third quarter.

Stellantis returns to sluggish sales

After breaking its US sales decline in the second quarter, Stellantis returned to negative territory in the third quarter compared to last year, which was not a good year for Stellantis either. Meanwhile, the rest of the US industry saw a 16% increase in sales in the third quarter.

Stellantis US sales performance for the third quarter of 2023

Stellantis sales fell 2% to 379,817 units from a year earlier, their lowest third-quarter sales level in at least six years and far from the third-quarter high of 565,034 vehicles in 2019, according to Cox Automotive calculations.

The Chrysler brand was the lone gainer, with sales nearly doubling to 42,315 units, its highest volume in at least six years, from the third quarter. The increase came from one of the two models sold by the brand. The Pacifica minivan achieved a 120% increase in sales to 38,353 units. Sales of the old 300 sedan fell 5% to less than 4,000 units.

Jeep brand Stellantis volume fell 4% from a year earlier to 154,619 units, its lowest sales volume for the quarter in at least six years. In fact, Jeep sold nearly 100,000 fewer units in the recent third quarter than it sold in the third quarter of 2018.

The Grand Cherokee and Grand Wagoneer were the only winners for Jeep. Sales of Jeep’s largest vehicle, the Grand Cherokee, rose by a significant 52% to 57,915 units. The Grand Wagoneer saw its sales rise by 22%, reaching 7,248 units. The Wagoneer fell 22% to 2,867 units.

Wrangler price fell 12% to 41,090 units in the third quarter. Gladiator sales fell 34% to 14,202 units. The Toledo, Ohio, plant that makes the two models was on strike. However, Jeep had ample inventory of both models this quarter despite the strike, according to a Cox Automotive analysis of vAuto inventory data.

Ram sales also fell 4% to 134,378, the lowest volume in at least six years during the quarter. Due to the strong fleet market, the Promaster commercial truck achieved a 34% increase in sales to 22,446 units. But that was not enough to offset the 7% decline in Ram 1500 sales, which amounted to 109,391 vehicles in the quarter.

Dodge sales fell 23% to 46,217 units, their lowest level in at least six years. In the third quarter of 2018, Dodge sold more than 100,000 vehicles. The Charger and Challenger, both in their final year in their current form, were down 30% and 33%, respectively, during the quarter. Durango was down 14%. The new Hornet achieved sales of 1,753 cars.

Alfa Romeo sales saw the biggest decline, falling by 38% to 2,143 units, the lowest level in at least six years and only a third of the number of units sold in the third quarter of 2018.

Fiat sold just 145 cars this quarter, down 30% from a year ago. In the third quarter of 2018, Fiat sold approximately 4,000 units per quarter.

Decreased share of Jeep and Ram causes Stellantis’ market share to decline

With Stellantis sales down 2% and the overall market up 16%, Stellantis lost more market share. Its share was 9.56% in the third quarter, down from 11.38% a year ago to its lowest level in at least six years, and for the first time, it fell below 10% in that time, according to Cox Automotive calculations.

Only the Chrysler brand gained 1.06%, compared to 0.63% a year ago, to record its highest market share in the past six years.

Jeep’s share fell to 3.89% compared to 4.72% a year ago. This was Jeep’s lowest market share in at least six years and it was just under 4% share during that period. In comparison, in the third quarter of 2018, Jeep’s share was 5.82%. Likewise, Ram’s share fell below 4% to 3.38% compared to 4.07% a year ago.

Dodge’s share fell to 1.2%, compared to 1.8% a year and a half ago in the third quarter of 2019. Fiat did not even register a market share. Alfa Romeo’s percentage fell to barely 0.05%.

Stellantis boosted stimulus spending to an average of $3,709

After cutting incentives for most of last year, Stellantis, like other automakers, began increasing them in the second quarter and boosted them again in the third quarter. Stellantis increased spending 62% to an average of $3,709 per vehicle, compared to $3,134 in the second quarter, according to Cox Automotive calculations. Although higher, Stellantis’ incentive spending is still lower than the third quarter of 2018 to 2020, when it was close to $5,000 per vehicle on average.

US SELLANTIS incentives for the third quarter of 2023

As was the case in the second quarter, Jeep incentives had the largest increase, up 185% to an average of $3,048 per vehicle, which is close to the amount spent before the pandemic.

Rahm got the next biggest raise and the biggest incentive. Up 47%, Ram incentives averaged $5,724 per vehicle, which is even more than Ram spent in the third quarter of 2018 but still less than the nearly $7,000 paid in the third quarter of 2019.

Chrysler brand incentives rose 11% to $1,444, well below pre-pandemic highs of $5,000 to $6,000 per vehicle. Dodge incentives average $2,138 per vehicle.

Fiat fell 45% to $1,331 per vehicle. Alfa Romeo incentives received a 12% increase to $3,785 per vehicle.

The average Stellantis transaction price increased 5% to $57,771

Stellantis’ average transaction price (ATP) rose 5% to $57,771, the highest in any third quarter in at least six years, according to Cox Automotive calculations. All brands saw their ATP level rise except Alfa Romeo, which was flat. All of Stellantis’ brands had ATPs that were the highest in the third quarter in at least six years.

Average transaction prices for US Stellantis for the third quarter of 2023

Chrysler’s ATP rose 4% to $49,531. Volume leader Pacifica rose 2% to $49,931.

Jeep had a 3% increase to $54,848. The Wrangler had the biggest increase, rising 4% to $58,410. The Grand Wagoneer had the highest ATP for Jeep at $104,567, up 3%. The volume leader Grand Cherokee had an ATP of $56,447, up 3%.

Ram’s ATP rose 7% to $65,473. The Promaster commercial truck accounted for the bulk of the increase, with ATP jumping 24% to $60,894. The Ram 1500 gained 5% in ATP to $67,076.

Dodge’s ATP rose 8% to $52,983. Challenger contributed most of the increase, with a 13% increase in ATP to $53,653. The Charger made a 6% profit at $48,794. The Durango rose 9% to $58,407. The Hornet, which had just gone on sale, had an ATP of $38,241.

Alfa Romeo had fatality ATPs of $54,372 and $32,124 respectively.