Now also Alfa and Jeep: Dealer anger over Stellantis

Now also Alfa and Jeep: Dealer anger over Stellantis

The strong business in the USA as well as billions in cost advantages from the merger of Fiat Chrysler and PSA (with the Peugeot, Citroen and Opel brands) have helped Stellantis achieve record results. The adjusted operating pro forma profit almost doubled to 18 billion euros in 2021, as the group has now announced. In Germany, critical voices from trading partners are increasing again, who are particularly dissatisfied with the manufacturer's new bonus program. 

Stellantis' adjusted operating margin climbed to 11.8 (previous year: 6.9) percent in 2021, which is a very high value for a mass manufacturer and is even higher than what management had forecast. In North America, where Stellantis has a strong presence with the Jeep, Dodge and Ram brands, there was a record return of 16.3 percent.

Group sales climbed by 14 percent to 152 billion euros. “Today’s record results demonstrate that Stellantis is well positioned to deliver strong performance in even the most uncertain market environments,” said CEO Carlos Tavares. Stellantis also forecast a double-digit operating margin for the current year. However, high raw material costs and the Ukraine crisis are likely to weigh on 2022. However, the company is said to be well prepared to get through the crisis without major scratches.

The billions in profits for many smaller retailers of some corporate brands have a bad aftertaste. Because they are experiencing anything but golden times. The parent company Stellantis has terminated its dealer contracts on May 31, 2021 with two years' notice. To this day, dealers are hanging in the air, not knowing whether and, if so, how things will continue for them as authorized dealers of various Stellantis brands after 2023.

Meanwhile, dealers in Germany are also up in arms against the company for a completely different reason. As reported, a German court has upheld a lawsuit brought by the Association of German Opel Dealers (VDOH) against Opel for potential abuse of its market power. The VDOH had defended itself against the incalculability of Opel's remuneration system, especially against the possibility of unilateral changes, including interference with the margin.

Now the Alfa Romeo and Jeep dealer association has also raised the alarm and, as German specialist media report, has urgently asked for a continuation of the dialogue on several issues in sales policy. The main point of contention here is the new bonus system, which had previously infuriated not only Opel dealers but also those from Peugeot and Citroen. The dealers feel disadvantaged and ignored because they do not seem to be involved in the design of the new regulations.

Stellantis has announced a new bonus scheme for its Fiat, Alfa Romeo and Jeep partners at the turn of the year. In the 20-page letter, the manufacturer, like Opel, Peugeot and Citroën, makes success in customer satisfaction surveys the central bonus criterion. 

However, measuring customer satisfaction using the so-called “Net Promoter Score” seems downright absurd. As the German trade magazine kfz-betrieb reports, this is an evaluation method in which a six (out of a possible total of ten points) ultimately counts as little as a zero. On top of that, the system on which the payment of parts of the bonuses ultimately depends is said to be fed with bad data and spit out even worse data. The dealer associations are reportedly already examining legal steps here too.

Meanwhile, something else has been causing discussions in Germany these days: Stellantis canceled the two-year free connection guarantee, which has been given to every Jeep new car customer since 2015, at the turn of the year. The factory warranty was reduced from four years to two years. The mobility guarantee was also shortened to two years. According to reports, retailers are also reacting angrily to this.

In Austria, nothing has been changed about the warranty: According to the official website, every new Jeep car comes with a 4-year Jeep warranty as standard - that means 2 years of new car warranty plus another 2 years of JeepCare with a maximum mileage of 120,000 km.