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Stellantis dealers 'cautiously optimistic' about turnaround plans after meeting

Luke Ramseth, The Detroit News on

Published in Business News

Leaders of Stellantis NV's U.S. dealer network left meetings this week with the automaker's executives "cautiously optimistic" after a recent leadership overhaul, talk of long-awaited better vehicle incentives, and more clarity on the company's product plans, according to Kevin Farrish, the chairman of the dealer group.

That's a stark shift in tone compared to a month ago, when the Dodge, Chrysler, Jeep and Ram dealers sent a scathing open letter to CEO Carlos Tavares warning that a "disaster has arrived" for them and other company stakeholders in the form of plummeting sales and other business missteps. Dealers have complained for months of terrible sales and bloated inventories due to high prices, gaps in the vehicle lineup, and a lack of support from Stellantis leadership.

"They're coming ready to work with us, and not the previous approach, which was, 'Figure out a way to get it done,'" Farrish, a Virginia dealer, said Wednesday.

The dealer-company gathering, which occurs every few months, centered on Stellantis' Auburn Hills headquarters on Tuesday and involved 21 dealer council members and key executives like newly-appointed North America leader Antonio Filosa, who also heads the Jeep brand.

“We had a productive meeting with our National Dealer Council this week," said a Stellantis statement sent by spokesperson Diane Morgan. "We continue to work together to ensure our collective success, which starts and ends with delivering head-turning products that meets the demand of our customers."

Farrish said there was more transparency than in prior meetings. That included on Stellantis' long-term vehicle lineup plans, and on how the company intends to navigate increasingly stringent U.S. vehicle emissions standards. Executives also showed "genuine concern over dealer profitability," he said, which has taken a hit this year as some retailers say they are selling around half as many cars as in the past, and many at a steep discount.

To that end, Farrish said Stellantis leaders committed to re-thinking a customer satisfaction bonus program for the dealers, and maintaining recently-instituted incentives as long as they are working — such as lower interest rates, low lease rates, and cash bonuses. Dealers say those perks have finally helped start selling cars at a faster clip in October. Farrish also said the company will also end this month a less popular program that incentivized dealers to order more cars from the factory by providing them coupons, which they could use to discount other cars on the lot.

 

The dealer council leader said he couldn't share details of the product plan that was discussed, other than dealers felt comfortable with it, assuming it will be tweaked as consumer preferences shift. The retailers did get to drive the two EVs coming later this year, the Dodge Charger Daytona muscle car and the Jeep Wagoneer S SUV, and they also got a look at the next-generation Jeep Cherokee SUV, set to be released midway through next year.

Last week Stellantis announced a leadership reshuffling that included a new chief operating officer and new North America leadership, as well as an end date for Tavares' tenure. Filosa took over for Carlos Zarlenga as chief operating officer for the region, and will maintain his title leading the Jeep brand worldwide. Farrish said dealers were already familiar with Filosa due to his time at Jeep over the past year or so.

"I think he better understands the U.S. market than his predecessor," Farrish said. "Our hope is with this new leadership, and with the knowledge of the U.S. market, that he'll be freed up to get the job done."

He added: "I hope that (CEO Tavares) will support him and his efforts to turn America around, and get back the volume that they need, and we need."

Stellantis posted dismal U.S. sales through the first nine months of the year. It is working on reducing inventory levels that have had dealers in an uproar, and has said it expects to have no more than 330,000 vehicles in U.S. dealer inventory by the end of the year. Farrish said he hopes those inventory levels can be trimmed even further, with a goal of having no more than a three-month supply of vehicles at any time.

While he was more optimistic than after any other meeting with Stellantis leaders over the last two years, Farrish said dealers are still "in a holding pattern" to see if the company follows through on some of its pledges.


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