Sometimes less is more: Stellantis saw North American operations power profit gains for 2022, a year in which top brands Jeep and Ram saw their U.S. sales fall by double digits.
Adjusted operating income from North America surged 23 percent to $14.8 billion for the second year since the merger of Fiat Chrysler Automobiles and PSA Group. While the company reported that second-half shipments in the region fell 4.8 perecent to 902,000, net revenues rose 15 percent to $45.8 billion. All this in a year in which Jeep sales in the U.S. dropped by 12 percent and Ram sales by 16 percent.
Pricing power and higher-end content was the key.
Ram recorded its highest average transaction prices for the 1500 pickup, $57,000, and what it calls its heavy-duty trucks at $71,000. Stellantis said Ram has a 3.4 percent pricing power advantage against the benchmark. Stellantis touted Jeep’s pricing power in the U.S. as 9.4 percent better than its benchmark.
The region’s strong results come in advance of a pivot toward electrification that CEO Carlos Tavares has warned may be painful. But he assured investors that the company is ready to bring to North America the strategy that made it tops in commercial electric vehicles in Europe and No. 2 in overall EVs in Europe.
“We now have the technology, the products, the raw materials, and the full battery ecosystem to lead that same transformative journey in North America, starting with our first fully electric Ram vehicles from 2023 and Jeep from 2024,” he said in a statement Wednesday.
The truck brand is forging into electrification in 2023 with the battery electric Ram ProMaster van and will jump into the EV pickup race next year with the Ram 1500 REV, which was revealed at CES and promoted in a cheeky Super Bowl ad. The ProMaster EV will go on sale in the second half of 2023.
The company also said it ranked No. 1 in U.S. plug-in hybrid sales with 64,000, up 26 percent, led by the Wrangler 4xe, and said the all-electric Jeep Avenger has been honored with awards in Europe.
The North American results produced UAW-leading profit-sharing payouts. Stellantis will distribute an average of $14,760 to eligible UAW-represented workers as part of a contractually negotiated plan. About 40,500 workers are eligible for the bonus. The pay out is up slightly from 2021, when workers received $14,670 each.
General Motors‘ unionized workers will receive a profit-sharing bonus of up to $12,750 based on the company’s North American performance last year, while UAW members at Ford Motor Co. are getting an average of $9,176.
“The financial strength of Stellantis primarily relies on the company’s UAW workforce as evidenced by its financial report,” UAW Vice President Rich Boyer, head of the union’s Stellantis department, said in a statement. “Our members are the backbone of this company. We will continue to call on Stellantis to show our members the respect that is due to them by demanding that they provide a safe working environment to all employees and job security by investing in America.
“While we recognize that this profit sharing amount is rightly deserved, we also know that there is much work to be done.”