Jeep, the iconic American brand owned by Stellantis, has reportedly halted production of its top-selling Wrangler and Grand Cherokee models. This temporary stoppage, which began last week, affects two Detroit assembly plants and a factory in Toledo, Ohio. The move is attributed to high inventory levels and declining sales, reflecting broader challenges within the US manufacturing sector.
Stellantis, in a statement, confirmed “production adjustments” at the affected facilities but did not disclose the duration of the halt. The company is facing some of the highest inventory levels in the industry, coupled with a 21% drop in sales during the first half of the year. Dealers and analysts attribute these issues to higher prices and fewer promotions compared to competitors.
Stellantis, under the leadership of CEO Carlos Tavares, has prioritized maintaining profit margins and controlling costs while investing in electric vehicles. The company is also considering trimming production and reducing prices to address the excess inventory.
The decision to pause production underscores the challenges facing the US manufacturing sector. The Institute for Supply Management (ISM) recently reported that US manufacturing activity has been contracting for five consecutive months, indicating weak demand. The automotive industry is also grappling with fluctuating oil prices, further complicating the situation.
While the electric vehicle sector was once a hub of innovation, it is now facing a cooling off period. Major automakers like Ford and General Motors have scaled back their EV ambitions due to waning demand.
In this challenging landscape, Stellantis is not alone. Volkswagen is reportedly considering closing factories in Germany due to financial strains.
Stellantis’s US-listed stock closed at $16.08 on Wednesday, up 1.07% for the day. However, in after-hours trading, the stock dipped 0.25%. Year-to-date, Stellantis’s stock has fallen 30.24%.
