Excess vehicle inventories have been a problem for Stellantis this year, but the company also has ambitious profit goals.
But on Monday, Chief Financial Officer Natalie Knight said the company will cut inventories by 100,000 vehicles by the beginning of 2025.
“I just want to make really clear that from my point of view, if we have to make a trade-off, getting ourself clean for ‘25 is definitely going to be our top priority,” she said during a conference call with Bank of America analysts for the 2024 European Autos and Future Car Virtual Conference.
Knight told analyst Michael Jacks that the automaker, which owns the Jeep, Ram, Chrysler, Dodge and Fiat brands, had made a lot of progress in Europe and has begun to move to a better spot in the United States. The company had more then 430,000 vehicles on hand in the United States at the midway point of the year, she said.
“I think we’re off to a solid start. We’ve taken it down by 40,000 in the months of July and August. We’re going to continue to see reductions in September and throughout the year,” she said.
Knight’s comments came as the automaker has been buffeted by a series of challenges related to sales and profit declines and open criticism from key stakeholders, including its U.S. dealers and the UAW . The dealers, in a letter to CEO Carlos Tavares this month, said they’d been warning executives for more than two years that the direction that Tavares had set for the company, which they described as “reckless short-term decision-making” to secure record profits, would be disastrous.
Stellantis improved in August, but not 'out of the woods'
Knight, noting that “when times are tough, you get friction everywhere,” sought to emphasize a more optimistic view ahead.
“July was a very poor month, so, hopefully, that was the trough and now you’re seeing the movement up,” Knight said, noting there were “definitely” improvements in August but the company is not “out of the woods” yet.
The company doesn’t report U.S. sales monthly but it had noted, in response to the letter from dealers, that August sales were up 21% over July. Jacks called the U.S. sales picture last month encouraging, with Jeep growing for the first time in a long time and Ram down 15% but improving.
Knight noted that the "hard call" had been made to reduce production by more than 100,000 vehicles in the third quarter, and that the company had cut prices on some newer models and had looked at coupons or more consumer-facing activities for other models, an apparent reference to incentives.
More: Stellantis sales woes prompt theories, worries as UAW blasts CEO
Knight sounded pleased when asked why investors should buy Stellantis stock.
“We’re one of the largest companies, we’ve got a great power play of products coming out if you look at the next 12 months and the commercial value of it, and we're probably the most undervalued in the sector, so we’ve made some mistakes this year, and we’ve, I’ll say, paid the price in the share price,” Knight said.
Stellantis was trading at $15.36 per share just after 12:30 p.m. Monday, well down from its high earlier this year of $29.40.
Contact Eric D. Lawrence: elawrence@freepress.com . Become a subscriber . Submit a letter to the editor at freep.com/letters .
This article originally appeared on Detroit Free Press: Stellantis CFO says automaker will cut 100K vehicles from inventory by 2025
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