Stellantis cut production at several of its plants across North America, reducing volumes by nearly 100,000 units year over year, according to its Q1 report.
The automaker is making way for next-generation product launches in 2024, CFO Natalie Knight said during the company’s earnings call on April 30.
“For us, it's all about having a healthy inventory mix and making sure that we're really getting that balance right between ‘what does the consumer want and need today,’ and at the same time, ‘how do we bring the right product to market as we go forward?’” she said.
Knight offered analysts additional color on the shift in production during the call, drawing attention to the factories that experienced some of the biggest volume decreases.
- Stellantis slashed production at its Brampton Assembly Plant in Canada by 50,000 units year over year, after discontinuing the Chrysler 300, Dodge Charger and Dodge Challenger, Knight said. In support of its electrification plans, the automaker announced a $3.6 billion CAD investment into its Brampton and Windsor plants in 2022. The Brampton facility is being retooled and “fully modernized” in 2024, according to Stellantis’ website.
- Its Sterling Heights Assembly Plant experienced a reduction of 20,000 units year over year, Knight said. Stellantis is transitioning the Michigan plant ahead of the launch of its updated Ram 1500 light duty truck.
- Stellantis also paused production at its Saltillo Van Assembly Plant to prepare for capacity increases for the automaker’s Ram ProMaster, Knight said, resulting in 12,000 fewer units year over year.
- Q1 2023 volume included 12,000 Jeep Grand Cherokee vehicles from Stellantis’ Belvidere Assembly Plant, which was idled on Feb. 28 last year as the company prepares for future electrification initiatives, Knight said.
Stellantis’ focus in Q1 was to sell down prior generation products to make way for the new BEVs that will be built on the company’s STLA platforms. The automaker expects production of next-generation vehicles to ramp up “significantly” in the second half of 2024, Knight said, with the company expecting second-quarter revenues to improve sequentially as a result. In addition, Stellantis reaffirmed its full-year guidance of a double-digit adjusted operating income margin in 2024.
