Stellantis, the global automotive giant formed from the 2021 merger of PSA Group and Fiat Chrysler, is grappling with a series of challenges that threaten its stability.
The company, which owns brands such as Chrysler, Jeep, Ram, and Fiat, is dealing with labor unrest, slumping sales, and growing frustration among its US dealers.
In recent months, Stellantis has experienced a sharp drop in sales and profits. Dealers, facing lots full of unsold vehicles, have publicly criticized CEO Carlos Tavares, blaming the company’s pricing strategies and production decisions. Stellantis’ stock has dropped nearly 50% since its peak in March, and tensions with the United Auto Workers (UAW) have escalated as the union threatens strikes at several Stellantis plants.
UAW members claim Stellantis has broken promises regarding plant operations and job security, with UAW President Shawn Fain accusing Tavares of prioritizing profits over workers. The union may soon vote to authorize strikes in response to these grievances.
Stellantis dealers have also voiced their dissatisfaction. Kevin Farrish, chairman of the Stellantis National Dealer Council, expressed concern over management decisions that have led to declining market share and stagnant inventory. Dealers argue that Stellantis raised vehicle prices too high and delayed offering discounts, which, combined with rising interest rates, has made it difficult to sell new models.
As of June, Stellantis’ market share in the US had fallen to 8.6%, down from 10.4% a year earlier. Jeep, Ram, and Dodge dealers are particularly affected, with some reporting inventory levels nearly double the industry average.
In response to the criticism, Stellantis announced measures to regain market share, including lowering prices on certain models, such as the Jeep Compass, and offering deeper discounts on older inventory. Despite these efforts, analysts believe Stellantis will need to further reduce production and cut jobs to address the surplus of unsold vehicles, potentially aggravating tensions with the UAW.
Meanwhile, Tavares’ leadership has come under scrutiny. Stellantis recently acknowledged it is reviewing its leadership structure, though Tavares could remain CEO after his contract expires in 2026. However, some view the review as a signal of the board’s diminishing confidence in his leadership.
Stellantis is also facing increased competition from Chinese automakers and other global brands, further complicating its path forward.
Market Watch, the New York Times, and Fortune contributed to this reports.
