Stellantis Reports Major Declines

Stellantis, the automaker behind Jeep, Dodge, and Fiat, saw a 48% decline in net profit for the first half of 2024, amounting to 5.6 billion euros ($6.07 billion). This drop is linked to lower sales volumes, production issues, and a reduced market share in North America.

The company’s adjusted operating income also fell by 5.7 billion euros compared to the previous year.

“The Company’s performance in the first half of 2024 fell short of our expectations, reflecting both a challenging industry context as well as our own operational issues. What is requested to the local team is profit, share and customer satisfaction. When you don’t deliver for any reason that I can understand and help to correct, you may want to use a scapegoat. The budget cut is an easy one. It’s wrong.”

Stellantis CEO Carlos Tavares via CNBC

Despite these setbacks, Stellantis has upheld its 2024 financial targets, which include a double-digit operating income margin, positive cash flow, and at least 7.7 billion euros in capital returns to investors. Tavares believes that most of these issues will be solved by continuing to launch to plethora of new model launches, addressing the U.S. market’s problems specifically, along with aggressive price cuts, and possible layoffs if necessary.

“This is a very tough industry, a very tough period and everybody has to fight for performance. We will have to work hard to deliver that performance.”

Stellantis CEO Carlos Tavares via CNBC

In the U.S. particularly, Tavares cited ongoing operational challenges, such as inventory mismanagement and manufacturing problems. He claims that these are some of the primary reasons behind the recent negative effects that the company is currently facing.

Despite these issues, Stellantis has maintained its 2024 financial targets, which include a strong operating margin and significant returns to investors. Shares of Stellantis dropped about 8.5% following the announcement. The company’s North American market share decreased to 8.2%, and U.S. sales were down approximately 16% in the first half of the year.