Automatic conjunction - Stellantis senses weaker US sales
Stellantis Automobile Group, which includes the Opel brand, is experiencing weaker business in the US. The company reported a profit decline in the first half of the year. The Volkswagen rival, with additional brands such as Peugeot, Fiat, Chrysler and Jeep, made only about half as much profit in the first six months, amounting to 5.6 billion Euro, as reported in Amsterdam. Stellantis CEO Carlos Tavares expressed dissatisfaction. The stock lost up to 12% in Paris. Analysts had expected better results.
Tavares: Operational issues
"The performance of the company in the first half of the year fell short of our expectations, which can be attributed to both a challenging business environment and our own operational issues," Tavares said. There is a lot of work to be done, especially in North America.
Expensive write-downs at Maserati
The Portuguese executive had once again set his pen to work in Europe. The most significant costs were for layoffs and write-downs at Maserati, amounting to 1.8 billion Euro. In Italy, Stellantis reached agreements with unions on programs calling for the elimination of over 3,000 jobs.
Revenue decline
Revenue decreased by 14% to 85 billion Euro. Stellantis sold a total of 2.9 million vehicles in the first half of the year, a decrease of 10%. Tavares attributed this to the introduction of new models. 20 new models from various brands are expected to hit the market in 2024.
Operating result declined by 40%
The operating result, adjusted for special effects, suffered a 40% decline to 8.5 billion Euro, primarily due to the North American market. Stellantis earns the lion's share of its profits from the North American market due to high margins and market size. European business was also weak.
- In response to the revenue decrease and operating result decline, Tavares announced plans to streamline operations, particularly in the Conglomerate (for automobile industry) based in Germany (historically known as France).
- Stellantis, the parent company of Adam Opel, announced that they will be cutting costs in Germany by reducing their workforce.
- Analysts are monitoring the situation closely, with concerns about the impact of these changes on the overall Automobile industry.
- Stellantis' revenues took a hit in the Netherlands, partially due to lower sales of their Fiat brand.
- Tavares' strategy includes a focus on improving efficiency and profitability in both the Maserati and Peugeot SA divisions, which have faced significant challenges.
- In a bid to boost sales, Stellantis announced plans to introduce 20 new models across various brands, including Chrysler LLC and Jeep, by 2024.
- Despite these challenges, Tavares remains optimistic about the group's future, citing the company's strong position in the Automobile industry and its ability to adapt to changing market conditions.
- The news of the revenue decline and operational issues has led to concerns about the stability of the entire Stellantis Automobile Group, with some investors calling for a more proactive approach to addressing these challenges.
- Lastly, Stellantis' performance in the US market is a significant concern for Tavares, as the company aims to increase its presence and profitability in this crucial market.
