Stellantis has posted a set of disappointing financial results for the first half of the year as its brands struggled with product portfolio gaps, soft prices and swollen inventory.
“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,” said Stellantis CEO Carlos Tavares.
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At €85.0 billion, first half net revenues were down 14% y-o-y, while net profit at €5.6 billion was down 48% on year-ago levels.
Stellantis said lower financial performance in the first half of 2024 was driven principally by lower volumes and mix, with the challenging volume comparison due to a combination of inventory reduction initiatives, temporary product production gaps due to a generational portfolio transition, and lower market share – particularly in North America.
In North America, H1 shipments were down 18% (838,000 units), driven by discontinued products, including Dodge Charger/ Challenger, Jeep Renegade/ Cherokee as well as a decrease in Ram 1500 due to ‘mid-cycle action launch’.
In China, H1 sales were off 64% at 32,000 units. with net revenues almost halved to €1,072m and adjusted operating margin slashed to 5.3% from 14.8% last year. Stellantis said its China results reflected reduced shipments, currency effects and consolidation impacts from its Leapmotor investments.
The company said a focus on successfully launching a wave of significant new products in the near term means the impact of the ‘product portfolio’s coverage gaps’ has peaked.
It also said there will be management actions to improve the performance of North America, Europe and Maserati to ‘create significant performance improvement opportunities for the second half of 2024 and full-year 2025’.
On a positive note, Stellantis said that leveraging partner Leapmotor’s cost competitiveness and advancements in powertrains and connectivity means its Leapmotor International joint venture is on track to introduce its inaugural tech-centric electric vehicles, the C10 SUV and T03 car. The initial rollout will be in Enlarged Europe, followed by South America, Middle East & Africa and India & Asia Pacific by the end of 2024.
In the short-term, Stellantis has a problem with overhanging inventory in the US market and Stellantis CFO Natalie Knight told journalists that the company will reduce production in North America this quarter.
Carlos Tavares said: “We have significant work to do, especially in North America, to maximise our long-term potential.”
