Like most automakers, Stellantis was forced to idle some production lines in the quarter due to the lack of automotive semiconductors. The automaker lost 30 percent of planned production -- or 600,000 vehicles -- during the quarter.
"The level of chip shortage was probably slightly higher that what we had expected when we last spoke to the market in August," CFO Richard Palmer said.
The full-year toll of lost production due to the chip crisis would top a previous forecast of 1.4 million units, he said.
Palmer said the company was seeing a "moderate" improvement on chip supplies in October compared with the previous month and expected stockpiles to slowly build through the fourth quarter.
"Visibility on semiconductors continues to be a difficult subject for the industry," Palmer added.
Palmer said Stellantis forecasts a moderate improvement in shipments in the final quarter. "We see positive pricing across all regions," he said, adding he saw good progress on post-merger synergies and cost management.
North America report
North America revenue slipped 16 percent to $18 billion, but the new Jeep Grand Cherokee L that launched in June was a bright spot.
Stellantis said the L, the first Grand Cherokee with three rows, was the top-selling full-size utility vehicle in the U.S. market during the quarter with a 19 percent market share.
North America vehicle shipments fell 29 percent due to “production losses as a result of unfilled semiconductor orders and discontinuation of Dodge Grand Caravan and Journey,” the company said.
Dealer inventory in North America dropped by 272,000 units from the end of December.
The redesigned two-row Grand Cherokee will join the L later this year to bolster the Jeep lineup, which also got a boost in late September by the arrival of the premium Wagoneer and Grand Wagoneer SUVs.
Palmer said the Wagoneer and Grand Wagoneer are “in one of the highest segments in terms of profitability in the U.S. market. We didn't have anything there before.”
“The segment’s about half a million vehicles and you know Jeep has to go in there and compete with the triplets from GM and Lincoln Navigator, etc., which are great vehicles, but I think we have a great brand and a great couple of vehicles," he said.
"That's also going to be accretive to our margin, so I think North America as a business is in a good place.”
South America had a 10 percent gain in shipments thanks to strong demand for mid-cycle refreshes of Fiat Toro and Jeep Compass.
'Significant book of orders'
Palmer said Stellantis has a “significant book of orders from dealers trying to secure allocations” at a time when inventories are at historic lows.
“What's very healthy is that we're turning vehicles very quickly,” Palmer said.
There also is demand from fleet customers, Palmer said, but the dealer body is the first priority.
“We don't want to lose customers because they're waiting for vehicles far too long,” he said. “And I think some of that impact has been the reason why we saw Q3 market in the U.S. down year-over-year because there is a lack of supply into the retail channels.”