Although the popular Jeep Cherokee only disappeared for two years and returned with the 2026 lineup, the decision was one that certainly haunted Stellantis (STLA +5.77%) leadership. This segment of the auto market is lucrative and high-volume, with many of the Cherokee competitors tallying around 400,000 vehicles annually in the U.S. market.
The Cherokee's comeback shouldn't be understated and will be a critical component of Jeep's and Stellantis' turnaround -- but is it enough?
The 2026 Jeep Cherokee. Image source: Stellantis.
Stellantis is setting the stage
To understand why the Cherokee's resurgence is so important, investors need a bit of context for Stellantis' current situation. Stellantis' global sales under former CEO Carlos Tavares declined 12.3% from 2021 -- the year Stellantis was formed -- through 2024. That result was weighed down by a staggering 27% collapse in U.S. sales during that time frame.
Looked at another way, U.S. sales at Stellantis (then known as Fiat Chrysler) peaked in 2018, and since then it's been all downhill, culminating in a 42% drop through last year. More broadly, Stellantis' global market share has fallen significantly from 8.1% in 2020 to roughly 6.1% last year, per S&P Global Mobility.
The Jeep Cherokee is driving the turnaround
The Jeep Cherokee competes in one of the most lucrative and high-volume segments in the auto industry, and SUVs carry fatter margins and can be some of the most valuable products for automakers. If successful, the Jeep Cherokee will certainly drive the automaker's turnaround in the U.S., but it has reinforcements on the way, too. In fact, Stellantis plans to invest $13 billion in U.S. manufacturing operations over the next four years, which will add more than 5,000 jobs to its domestic workforce and increase domestic production by 50%.
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Key Data Points
"North America is a very strong growth in volume. ... It is very encouraging," Stellantis CEO Antonio Filosa told investors when discussing fourth-quarter results. "This growth will be the largest contributor in the world for Stellantis' profitability."
Reinforcements include a new midsize truck for a plant in Ohio, two new Jeep vehicles for a facility in Illinois, a next-generation version of the Dodge Durango SUV, an all-new range-extended electric vehicle (EREV), and a gasoline-powered large SUV at its plant in Michigan.
Signs of life for Stellantis stock?
While Stellantis' 2025 results were sobering for investors, thanks to a full-year net loss of $26.3 billion driven by a massive readjustment of its electric vehicle strategy, there were some signs of life late last year. During the second half of last year, Stellantis' results were encouraging, with consolidated shipments checking in at 2.8 million units, driven by North America posting the strongest contribution. That helped push net revenue 10% higher to nearly 80 billion euros during the second half of 2025, compared to the prior year.
Those early positive signs are a reflection of quickly improving operational efficiencies and more disciplined commercial strategies. This year will have Stellantis' focus on closing execution gaps to drive more profitable growth, but also conserving cash by suspending its dividend for 2026. Management is aiming for a mid-single-digit percentage increase in net revenue for 2026, a low-single-digit adjusted operating margin, and a return to positive industrial free cash flow in 2027.
The Jeep Cherokee's return shouldn't be overlooked, and it will be a crucial part of turning around Stellantis' results in North America, its profit engine. Investors, however, should take serious note that Stellantis' challenges are many and severe, and this turnaround will take years.
