Stellantis has announced a recall of 194,000 plug-in hybrid Jeep SUVs, specifically the 2020 through 2024 model year Jeep Wrangler and the 2022 through 2024 Jeep Grand Cherokee, following reports of 13 fires linked to a defect in a battery component. Owners are urged to park their vehicles outside and away from other cars and structures until necessary repairs are completed, as the fires occurred while the vehicles were parked and turned off. The automaker estimates that about 5% of the affected vehicles may have the defect.
The recall affects 154,000 vehicles in the United States, 14,000 in Canada, 700 in Mexico, and nearly 26,000 outside North America. After conducting a routine review of customer data, Stellantis initiated this action to investigate potential internal fire risks. Stellantis advised owners to deplete the battery charge level and refrain from recharging their vehicles until the company implements the remedy, which they state is imminent.
In addition to the recall, Stellantis is grappling with significant financial challenges, particularly in North America. The automaker has revised its financial guidance for 2024, projecting an adjusted operating income margin of 5.5% to 7%, down from the previously forecasted double digits. The company attributes two-thirds of this reduced margin to necessary corrective actions in North America. Furthermore, Stellantis expects industrial free cash flow to decline significantly, projecting a range from negative $5.57 billion to negative $11.14 billion.
Stellantis is also implementing strategies to manage its inventory levels. It aims to reduce dealer inventory in the U.S. to no more than 330,000 units by the end of 2024, accelerating this target from a previous timeline of early 2025. The automaker plans to cut over 200,000 North American vehicle shipments in the latter half of this year, increase incentives for older model-year vehicles, and initiate productivity improvement measures, including cost and capacity adjustments.
The company is currently facing various external pressures, including heightened competition from Chinese automakers, which has contributed to the recent decline in U.S. sales figures. Stellantis recently announced layoffs of supplemental and union-represented workers at several U.S. manufacturing facilities as part of its restructuring efforts. Despite these challenges, the automaker remains optimistic about leveraging its competitive advantages and believes implementing recovery actions will lead to stronger operational and financial performance by 2025.
Stellantis is expected to release its third-quarter U.S. sales numbers soon, which have seen significant declines in recent periods.
