With new-vehicle inventory thin and dealer profitability under pressure, Stellantis retailers have spent the past year absorbing the fallout of a rocky product strategy. During today’s Inside Automotive episode, Dave Kelleher, president of David Auto Group and Stellantis dealer, explains why he believes the brand’s struggles trace back to a flawed strategy under former CEO Carlos Tavares. He also explains why he’s confident new CEO Antonio Filosa can turn things around.
Kelleher says the core problem at his stores is a lack of inventory lines to sell, not customer demand. Nameplates like the Renegade and the 300 have been discontinued, and the Charger only recently returned to showrooms with a gas-powered retrofit. He used to sell 185 new cars a month. Today that number is closer to 85 or 90.
Dealers need product, not more cuts
Kelleher didn’t hold back in assessing Tavares, calling him “a flawed individual” with “a flawed idea about this company” who cut corners on vendors and mispriced vehicles across the lineup. By contrast, Kelleher says he’s known Filosa for years and counts him as a friend. He credits the new CEO with a clear roadmap.
“He’s got the right idea. He understands it,” said Kelleher. “He’s got a plan that by ’28, we have a really revised line, and by ’30, it’s kick-ass.”
As an early proof point, Kelleher pointed to the Jeep Grand Wagoneer. Tavares had stripped the Jeep badge and pushed prices too high, but the SUV was later repriced from $117,000 to $99,000. Kelleher said he just ordered 15 more units in his latest cycle because demand has picked up so quickly. He also welcomed news that Stellantis plans to introduce nine models priced under $40,000. He called it critical given how concerned buyers are about monthly payments.
Affordability is squeezing every deal
Kelleher shared a recent example: a customer coming off a lease on a Grand Cherokee had been paying $485 a month, but new numbers came out to $650. He and his team found a way to make the deal work, but he called it a difficult proposition. Industry-wide, Kelleher put the average monthly payment at $783.
Rising rates haven’t helped either. Three years ago, a great rate was 2.5 to 3.5%, Kelleher said. Today, a great rate is 6%. Leasing remains a major part of his business, with lease penetration at 58%. Kelleher says the shift helps bring customers back in three years, but it can hurt F&I revenue because leased vehicles are typically covered during the term. He also said his store is seeing a surge in lease buyouts, as drivers choose to keep vehicles they’re comfortable with rather than take on higher payments.
“When dealers aren’t making money, they can’t invest in advertising. They can’t enhance their dealerships. They can’t build new buildings. They can’t do the things that are necessary to run a successful dealership”
Dealers want dollars back, not charity
Kelleher said Stellantis needs to restore dealer incentive money pulled under Tavares. That includes customer satisfaction funds eliminated in anticipation of a stair-step program that died within a couple of months of being introduced. He estimated that decision cost him roughly $70,000 a month. He noted that dealer profitability at Chrysler stores was recently measured at 1.1%, up from 0.08%. That’s still far below NADA’s 4% benchmark and second-lowest among major brands, ahead of only Nissan.
“I’m not talking about charity. I’m talking about: set a goal for us and allow us to achieve that goal, and then pay us for it,” said Kelleher.
Kelleher also pointed to marketing as an area where Tavares cut too deep. Tavares ended Stellantis’s long-running Super Bowl advertising streak before the company returned to the big game this year. He said the Super Bowl is a branding moment that tells the market who a company is. Pulling out never made sense for a business that runs on transaction volume.
Kelleher pushes back on Carvana’s franchise move
Asked about Carvana’s expanded role selling Stellantis vehicles, Kelleher didn’t hold back.
“I hate it,” said Kelleher. “Stellantis was the only one that let Carvana in the door, and it should never have happened. The places that they went, they’re really taxing the dealers that are around them. It’s hurting them because they don’t care. They don’t care.”
He argued Carvana’s model puts nearby franchised dealers at a disadvantage. Its stores have no service department and kiosk-style, low-staff showrooms, and the setup helps Carvana source trade-ins for its own used-car business.
FTC compliance needs to stay simple
With FTC vehicle-pricing scrutiny top of mind for the industry, Kelleher explained why he’s never posted prices online. Instead, he requires customers to request a price directly, which he says signals a serious buyer.
“Send me a note, and within three minutes, we return a price to them… it’s the price, it’s the discount, the rebates, and the fees, including dock fee,” said Kelleher.
Kelleher said the situation is concerning, but he’s hopeful NADA and the FTC can land on a standard that works for the whole industry, and it can be a smooth process. He argued any rule needs to be simple enough for a small dealer to follow without hiring outside help.
“He’s not going to take in a consultant to understand, to help him with compliance on FTC. It’s not reasonable. You need to get to a place where it’s just boom, boom, boom. It’s easy,” said Kelleher.
Looking ahead, Kelleher said that in less than two years, Stellantis dealers will have three vehicles priced under $30,000: the Chrysler Pronto, the Dodge Hornet, and the Jeep Compass.
“When we do that, Stellantis dealers are going to rock and roll,” Kelleher said.
