Why incentives are bad for Stellantis dealers

Inventory and customer satisfaction have nothing to do with why CDJR stores are struggling. Their product lineup is stale, not competitive, they offer few hybrid/efficient vehicles, but most importantly they are too expensive for today's consumer. Incentives are the only way they're going to move inventory. Stallantis has also let dealers sell off portions of their new car inventory at auction just to get out from under it. My gut tells me this isn't going to end well for Stellantis or their dealer network.

Glad I’m with Lexus. Sitting on a 12 day supply. Wish I had a few more but I’ll live. Finished #3 in region turn rate delivering 138 newim April. We were down in Units delivered of 190 in March as we ran out of hot product. I’ll finish May under 10day supply #lexusstrong #toyotastrong

Incentives drive behavior within the parameters of affordability. In a need-based demand market like this, affordability trumps incentives. The Automotive Advisor Team helps dealers build inventory plans based on market-driven insights as well as the dealer’s specific inventory around their local market’s demand by price and segment. It's important to be cautious of overgeneralizations using historical automotive KPI performances that no longer fit as they once did in our new post-COVID auto market.

I have a jeep grand Cherokee summit. 3 years ago it cost me $62,000. Today it’s listed new at $72,000. They have priced themselves out of the market.

Yes, this old trick again. Oh and lets not forget what this does to the used car market as well????? hmmmmm These are strategic moves the manufactures will use to inflate or deflate quarterly numbers only thinking about the out come form there view point high on that mountain. If you are a CDJR consumer thinking about trading, now just might be a great time to make that upgrade, to another brand...... or wait it out because once all these ordered units are picked up in about a quarter they will be trying to find a way to move them......big incentives. And big losses on theses trade ins because now you will get 20k off the new one and 20k less for your trade....

Stellantis lost me as a life-long Jeep customer. They're intentionally packaging these cars so they can price them in the same league as luxury cars. But that's never been what that brand has been about. I was in the market last year after my Wrangler got totaled, and I couldn't believe the prices on available inventory. $55k-$60k for a box on wheels (up ~30% over what my last Jeep of comparable trim cost), for a depreciating asset, from a brand with notoriously bad reliability. Couldn't imagine a worse deal. Their pricing and offerings forced me to defect, so I defected to Mazda and now only wish I had done it sooner. Good sensibilities and fair pricing. I can't imagine what "incentives" Jeep would have to throw my way to get me to come back to the brand. That's to say, this isn't just a "the market needs to work itself out" problem, this is a, "I'm not looking for another car for several years, and even when I do, you won't be on the shortlist" kind of problem. I wouldn't be surprised if it takes them the better part of a decade to get their sales back. Two of my grandparents worked at that factory in Toledo, if that gives you any idea of the level of consumer goodwill they've torched.

My dad use to always say: "Be careful, a factory hero becomes a zero". Not always, but most of the time, the dealers winning all the awards and praise from factory programs end up suffocating themselves with too much inventory.

That sounds to me as if the OEM is severely out of touch with their dealer body and more importantly the consumer.

It sounds like Stellantis has realized what many of us in the business have been saying for ever; incentivizing for positive customer surveys does not result in increased customer satisfaction. Doubts? ask JDPower. https://www.jdpower.com/business/press-releases/2024-us-customer-service-index-csi-study What is does do is increase the pressure on advisors and salespeople to get "all 10s", resulting in survey begging. It's a huge turn off to customers who feel they can't say what they really feel because their advisor told them "little Jimmy needs a new pair of shoes." So, when they get a syndicated survey, they let loose with what they really feel. Incentivizing survey scores gives OEMs a false sense that things are going great. Additionally, you can't fix a customer if you don't know they are broken, and these surveys are a key component in knowing that a customer needs additional attention. Essentially, begging for 10s is shooting yourself in the foot as it relates to concern resolution and customer loyalty. On a final thought, Stellantis wants to move metal. So, they incentivize moving metal. If general mills wants to move Cheerios, guess what, they put incentives on Cheerios. I'm not sure what the mystery is here?

Possibly done intentionally to "thin the herd"? The big power house dealers take advantage and order a ton of vehicles. The smaller dealers can't / won't and can't compete and are forced out. Less "self" competition, higher demand and profits? While I agree, the move seems stupid looking in at it, something tells me the folks at Stellantis have a game plan in mind.