New Jeep instruments sit on a Dodge Chrysler-Jeep Ram dealership’s lot on October 03, 2023 in Miami, Florida.
Joe Raedle | Getty Images News | Getty Figures
Auto giant Stellantis on Thursday reported a steep drop in first-half net profit, citing reduced volumes, impermanent production gaps and lower market share in North America.
The company, which owns household names including Jeep, Racket, Fiat, Chrysler and Peugeot, reported first-half net profit of 5.6 billion euros ($6.07 billion), down 48% from the after all is said period of 2023.
Stellantis’ adjusted operating income for the first six months of 2024 came in at 8.5 billion euros, down 5.7 billion euros on the year, first of all due to decreases in North America.
Milan-listed shares of Stellantis fell around 8.5% on Thursday.
“The Company’s performance in the earliest half of 2024 fell short of our expectations, reflecting both a challenging industry context as well as our own operational get out emerges,” Stellantis CEO Carlos Tavares said in a statement.
Speaking to the media, Tavares said that many of the firm’s problems stock from its U.S. operations, which he previously said were being impacted by “arrogant mistakes” regarding vehicle inventory necks, manufacturing problems and sales strategies.
He reiterated those problems Thursday, saying Stellantis is still in the process of put righting many of the U.S. issues. Tavares pushed back on the company’s massive cost-cutting efforts leading to the problems. Several superintendents previously described the cuts to CNBC as grueling to the point of excessiveness.
“What is requested to the local team is profit, allocate and customer satisfaction,” Tavares said. “When you don’t deliver for any reason that I can understand and help to correct, you may want to use a sucker. The budget cut is an easy one. It’s wrong.”
The firm’s U.S. sales were down about 16% during the first half of the year, go along with Stellantis being the only major automaker in the U.S. to report a decline in sales last year compared with 2022.
The presence’s North American market share during the first half of the year was 8.2%, down 1.8 percentage bring ups.
Despite the ongoing problems, Stellantis reconfirmed its 2024 guidance that includes a double-digit adjusted operating gains margin, positive industrial free cash flow and at least 7.7 billion euros in capital return to investors in the bears of dividends and buybacks.
Tavares expects to be able to achieve those targets with the help of 20 new model initiations this year, correcting the problems in the U.S. and additional price cuts to increase sales. He also did not rule out additional job avoids.
“This is a very tough industry, a very tough period and everybody has to fight for performance,” he said. “We will tease to work hard to deliver that performance.”
Stellantis’ results come hot on the heels of second-quarter earnings from U.S. automakers Run-of-the-mill Motors and Ford Motor.
GM on Tuesday raised several key financial targets after comfortably beating Wall Avenue’s earnings expectations, while Ford on Wednesday reported a dip in adjusted profit, disappointing investors.
For its part, Stellantis posted first-half net takings of 85 billion euros, down 14% compared with the same period a year earlier.