Dealer Insight: Stellantis incentives offer little relief amid inventory woes

Stellantis is offering inventory-driven incentive programs for dealers as the manufacturer looks to support new-vehicle production but remains stringent on available deals. Supply and production woes are also prompting pushback from dealers and union members. The United Auto Workers union plans to ask members to approve a strike against Stellantis NV related to the manufacturer’s promised product commitments in last year’s agreement , according to a speech Tuesday by union President Shawn Fain . Stellantis responded, and the company’s statement reads, in part: “Shawn Fain continues to allege that the company has violated the contract, but to date has provided no data or information to back up his claims. … We would all be better served if these issues were addressed across the table with productive, respectful and forward-looking dialogue. A strike does not benefit anyone." Limited deals add to woes Dealers are finding it challenging to move vehicles amid little pricing relief from Stellantis. [caption id="attachment_58344684" align="aligncenter" width="1024"]<img class="wp-image-58344684 size-large" src="https://www.autofinancenews.net/wp-content/uploads/2024/09/414185671-1024x714.jpg" alt="New Fiat Grande Panda EV model automobiles in cradles on the production line at the Stellantis NV manufacturing plant in Kragujevac, Serbia, on Monday, July 22, 2024. Fully electric and hybrid variants of the Grande Panda are planned for Serbian production. Photographer: Oliver Bunic/Bloomberg" width="1024" height="714" /> Photographer: Oliver Bunic/Bloomberg[/caption] Stellantis NV is offering $500 coupons on new-vehicle orders that can apply as cash rebates, Jay Slingerland , vice president of Corunna, Mich.-based Slingerland Chrysler Dodge Jeep Ram Fiat , told Auto Finance News . Slingerland is also the national sales director for Credit Union Leasing of America , which has lost a large portion of its leasing share to SFS . The coupons are offered on new-vehicle orders and the amount varies by model, he said. Dealers can stack the coupons for a larger cash rebate for consumers but only while coupons last, Slingerland said. “If dealers ordered additional vehicles at the tail end of last month into this month, then they would earn coupons,” Slingerland said, adding that the program goes through Oct. 31. The issue is some dealers face an abundance of supply and do not need to order more vehicles to get the coupons, he said. Available deals A Stellantis spokesperson did not provide further information on the dealer coupon program but noted that several incentives are available at various dealerships. In August, Stellantis’ incentive spending rose to 7.8% of the average transaction price, up from 5.7% of ATP in July, and higher than the industry average of 7.2%, Erin Keating , executive analyst with Cox Automotive , told AFN . The jump in Stellantis’ average incentive package likely reflects the manufacturer’s attempts to catch up with industrywide incentive efforts and dealer demand, she said. Several dealerships are providing cash offers on various models with retail delivery by Sept. 30, according to Stellantis dealerships’ websites. New Jersey-based Chrysler Dodge Jeep Ram of Englewood Cliffs is offering for eligible buyers, according to the dealership’s website: $3,000 in 2024 retail bonus cash and a $697 dealer discount on the silver 2024 Chrysler Pacifica Hybrid; $3,000 in 2024 retail bonus cash and a $925 dealer discount on the black 2024 Chrysler Pacifica Hybrid; and $2,000 in 2024 retail bonus cash and a $3,413 dealer discount on the 2024 Jeep Wrangler Sport S. New York-based Chrysler Dodge Jeep Ram FIAT of Manhattan discounts for eligible buyers include, according to the dealership’s website: $2,000 in bonus cash and a $412 dealer discount on the 2024 Jeep Wrangler 2-door Sport S; and $2,000 in retail bonus cash, $500 in bonus cash and a $328 dealer discount on the 2024 Chrysler Pacifica Limited. Focus on Stellantis Financial Stellantis has been conservative with incentive dollars as the manufacturer targets certain vehicles and looks to grow its captive, Stellantis Financial Services (SFS), which it formed in 2021 when Stellantis NV acquired F1 Holdings Corp. , the parent company of First Investors Financial Services . Stellantis also limits non-subvented cash rebates applied to lease transactions financed by lenders other than SFS, Slingerland said. Stellantis Financial “does not have the liquidity that they need at this point to be able to support all models right now,” he said. SFS’ portfolio surpassed $10 billion in the second quarter, Stellantis NV Chief Executive Carlos Tavares said during the OEM’s July 25 earnings call. SFS had a portfolio of $7 billion at yearend 2023, making it the 32nd-largest auto lender by outstandings volume, according to the latest Big Wheels Rankings data . Retail sales down in Q2 Stellantis’ total U.S. sales fell year over year in the second quarter, joining YoY market declines in the manufacturer’s North American market share. Second-quarter U.S. sales for the manufacturer fell 21% YoY to 344,993 vehicles, according to a July 2 earnings release. Stellantis’ North America market share sat at 8.2% during the first half of 2024 compared with 10% in the first half of 2023, according to the manufacturer’s H1 2024 earnings presentation published on July 25. The automaker’s market share is likely to continue to decrease into 2025 as the OEM isn’t increasing sales, Slingerland said. “Where our price points are at today, they’re not competitive, so it’s taking longer for the current vehicles to sell,” he said, adding that new 2025 models coming to dealerships will have MSRPs lower than their 2024 counterparts. “With [Stellantis] not offering clearance dollars or additional incentives to move out the 2024s, it makes it that much more strenuous.” Dealers sound alarm The U.S. Stellantis National Dealer Council on Sept. 10 tried to “sound an alarm” in an open letter addressed to CEO Tavares and the U.S. executive team, which indicated that the “disaster” the council has warned about for more than two years had arrived. Statements made by the council tied the “rapid degradation” of the Jeep, Dodge, Ram and Chrysler brands and the “drastic market share downturn” to the manufacturer’s “reckless short-term decision-making to secure record profits in 2023.” The council wrote, “The market share of your brands has been slashed nearly in half, stock price is tumbling, plants are closing, layoffs are rampant and key executives are fleeing the company,” adding that the manufacturer’s distribution network and dealer body “has been left in an anemic and diminished state.” Stellantis speaks out Stellantis addressed the council’s concerns on Sept. 11 in a public statement, saying that the company’s overall performance is on the path to correcting due to an “action plan developed with the dealer body” in August. The response shared by Stellantis also indicated that August sales “were up 21% over July, market share was up 0.7 points and dealer inventory was reduced for two consecutive months by 42,000 units or approximately 10% in total.” Stellantis declined to comment beyond the published statement. Still, dealers are less likely to support production with additional orders when faced with higher supply and limited incentive support, Slingerland said. “We're getting calls... asking for orders ... and the answer across the board is absolutely not." -- Jay Slingerland , Slingerland Chrysler Dodge Jeep Ram Fiat “We're getting calls from our reps asking for orders to keep the factories going, asking for orders to keep different car lines moving, asking to keep different plants operational, and the answer across the board is absolutely not,” Slingerland said. “Not until we can get real support from the manufacturer.” Auto Finance Summit, the premier industry event for auto lending and leasing, returns Oct. 7-9 at Wynn Las Vegas. To learn more about the 2024 event and register, visit www.AutoFinanceSummit.com.

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