American car brands Jeep, Ram, Dodge and Chrysler are struggling under their new owner.

The European-American giant Stellantis is the world’s fifth-largest automaker by volume, according to S&P Global Mobility. The 2021 merger of the French maker Groupe PSA and the American-Italian Fiat Chrysler promised billions of dollars of savings in synergies and new opportunities for brands spanning two continents to share the burden of developing costly new technologies such as electric vehicles and software.

Some of those promises came to fruition.

“At first, the market was quite doubtful whether Stellantis could pull off the $5 billion in synergies between the two companies that they had announced,” said Daniel Roeska, managing director at Bernstein.

But Stellantis did better than that.

“They managed to pull off $8 billion,” he said. “And then they stopped counting.”

2023 was a banner year: record sales, record profits, record free cash flow.

Behind those results, all kinds of problems lurked.

Customers balked at high prices. Products grew stale, while competitors refreshed their own lineups. Product quality complaints dogged the company, especially on new Jeep models with price tags that ran above $100,000 — new territory for the brand.

Sales in the first half of 2024 fell 14% and profits plummeted by nearly half, the company said. Shares of the stock have also fallen, from an all-time high of $29.51 in March to just above $13 in early October.

At the heart of this are high inventories in North America, the home of the Jeep and Ram truck brands, estimated by RBC Capital to make up about 50% of Stellantis’ profits.

Out of all brands in the U.S., Stellantis vehicles have some of the highest inventories of vehicles on dealer lots, according to Cox Automotive. That means they aren’t selling.

“North America operations were highly profitable and kind of seen as a little bit of a cash cow,” said Stephanie Brinley, director of the AutoIntelligence unit at S&P Global Mobility. “Maybe the idea was it could run itself with not much influence. But it still needed support.”

Now dealers are furious — the company’s council of dealers in North America sent an open letter to Stellantis’ top management, including CEO Carlos Taveres, accusing them of ignoring warnings and making mistakes that have led to the company’s struggles.

The United Auto Workers union is threatening to strike again. Disputes with suppliers have ended up in the courts.

“The whole discussion on Stellantis has basically collapsed,” Roeska said. “We’re not talking about free cash flows. We’re not talking about long-term EV strategy. We’re not talking about market position or the China Leapmotor joint venture. We’re only talking about how much will it cost the company to get rid of the U.S. inventory.”

Stellantis does have a lot of new products expected in the next few years, and a highly flexible platform that can accommodate multiple powertrains — EVs, hybrids and old-fashioned gas-burning cars. That could help it weather an uncertain time in the auto industry when demand for EVs is rocky and unpredictable.

But the next six to 12 months could also be quite rocky.

Watch the video to learn more.