Thomson Reuters
Stellantis wants to earn back the trust of its US dealers after a tumultuous year. It won't be easy.
The Jeep owner topped the list of least-trusted franchises among dealers in Kerrigan Advisors's annual dealer survey, with a whopping 72% of Chrysler-Dodge-Jeep-Ram dealers reporting they have "no trust" in Stellantis.
The dismal result for Stellantis — the highest rate of "no trust" responses in the survey's history — comes after a tumultuous year for the global automotive giant. Aggressive cost-cutting measures rankled US dealers, many of whom wrote an open letter criticizing the company's product decisions over the summer.
Amid slowing sales and shrinking dealer profits, the letter accused former CEO Carlos Tavares of "reckless short-term decision-making" that had "devastating, yet entirely predictable, consequences in the US market."
CFO Doug Ostermann told investors that rebuilding trust with dealers is a top priority for the next management team.
Following Tavares's abrupt exit last month, Stellantis dealers were relieved. Kevin Farrish, the Stellantis dealer body president and Chrysler-Dodge-Jeep-Ram owner in Virginia, told Business Insider at the time that he was encouraged by how swiftly executives were making changes after Tavares's exit.
"We needed change, so provided the changes are correct — and they are thus far — it shows their commitment to fix things," Farrish said.
A Stellantis spokesperson did not immediately respond to a request for comment.
The results of the annual Kerrigan Dealer Survey are often in line with what dealers say publicly throughout the year. In 2023, for example, Ford was the least-trusted company among dealers after the parties disagreed over EV strategies.
But the results of this year's survey, based on more than 635 anonymous responses from dealers in Kerrigan Advisors database between June and November, offer the first concrete look at the rift between Stellantis and its dealers. And the divide is stark.
For context, about 46% of dealers reported "no trust" in Ford last year, showing that a slim majority still had trust in the Detroit automaker. That makes the 72% of dealers who reported "no trust" for Stellantis all the more alarming, Kerrigan told Business Insider in an interview.
While Ford and its dealers disagreed over EV strategies, Stellantis dealers felt more betrayed by their company, Kerrigan said. Efforts by the company to raise prices after the pandemic cut deeply into dealers' profit margins
"The difference here is numbers-based," Kerrigan said of the stark difference between Ford and Stellantis's divide with dealers. "Stellantis saw dealer profit margins during the pandemic and wanted a piece of that."
In addition to losing trust in their brands' strength, more than 64% of dealers surveyed said they expect their franchise values to decline in the next 12 months.
