(Milan) Stellantis, the world’s fourth-largest automaker, cut its profit forecast on Monday, citing investments to turn around its U.S. business amid a broader industry slump and competition from China increased.
Published yesterday at 8:42 a.m.
Stellantis said it was accelerating its efforts to turn around its North American business, including reducing dealer inventory levels to as many as 300,000 vehicles by the end of the year, instead of the first quarter of 2025 as previously planned.
The move comes following a decline in shipments of 200,000 vehicles in the second half of this year compared to the previous year, twice as many as the company had expected. The company will offer higher incentives on 2024 and older models.
Stellantis expects to end the year with negative cash flow of €5-10 billion, instead of positive.
The automaker, born in 2021 from the merger of PSA Peugeot with Fiat Chrysler Automobiles, also lowered its operating profit margin forecast to 5.5% to 7.0%, instead of a forecast above 10%. .
The struggling Jeep and Ram maker is seeking a new leader to succeed Carlos Taveres, who is under fire from U.S. dealers and the United Auto Workers union after a dismal first-half financial performance. The company presented this approach as a normal management succession plan.
Stellantis is also under pressure in Italy, where one of the main shareholders resides, due to production cuts. Auto workers announced a one-day strike on October 18.
The company reported that first-half net profits were down 48% from the same period last year. In the United States, first-half sales fell nearly 16%, even as overall new vehicle sales rose 2.4%.