The Stellantis group, the giant born in 2021 from the merger between PSA (Peugeot, Citroën, DS Automobiles, Opel, Vauxhall) and Fiat Chrysler Automobile (FCA), caused an earthquake on the financial markets this Monday. The latter announced a drastic revision of its forecasts for 2025, causing its shares to fall dramatically in a single day. This stock market tumble reflects investors’ concern about a financial outlook that is much bleaker than expected. Nothing seems to be going in the right direction for Stellantis, which has gone through strong turbulence in recent years: job cuts, quality problems on certain models, massive vehicle recalls and difficulties linked to the electrification of its fleet.
A dizzying drop in forecasts
The group, which oversees iconic brands such as Jeep, Peugeot, Ram and Chrysler, has drastically reduced its financial objectives for the coming year. The markets reacted immediately, with a spectacular fall in the share price, losing nearly 15% of its value in a single trading session.
The operating margin, initially announced at two figures, is now estimated between 5.5% and 7%. This revision is accompanied by an alarming forecast regarding cash flow, which could plunge into the red to the tune of several billion euros. These figures contrast sharply with the assurances given by management just a few months ago.
A CEO in the hot seat
An internal crisis which highlights, certainly not as he would like, Carlos Tavares, the CEO of the group. Once acclaimed as an outstanding manager, today he finds himself in a very delicate position. Criticism comes from all sides, particularly from American dealers who point the finger at its erratic inventory management. The board of directors even seems to be considering his replacement, a prospect, until recently, unthinkable.
The Stellantis situation is not isolated. Other automotive giants, notably German ones, have also revised their forecasts downwards. This trend reflects the growing difficulties of the sector, faced with increased competition, particularly from of a country that makes them all tremble: China.
China’s shadow looms over industry
The Chinese market, once an El Dorado for Western manufacturers, has become a source of concern. The slowed growth of the Chinese economy, coupled with the emergence of formidable competitors like BYD, is upsetting the established balances. Traditional manufacturers are forced to review their strategies, both on the Chinese market and in the face of the international expansion of local brands. Xiaomi’s sensational entry into the automotive industry will certainly not help matters.
In this more than delicate situation, Stellantis will have to demonstrate with great agility to get back on track. The next publication of quarterly results, scheduled for the end of October, will be closely analyzed by investors and analysts. They will most likely be on the lookout for slightest sign of recovery or further deterioration.
- Stellantis revised its forecasts for 2025 downward, causing the stock market to fall by 15% in one day.
- Its operating margin drops to 5.5-7%, and cash flow could also plunge by several billion euros.
- Carlos Tavares, CEO of Stellantis, faces intense criticism and could be replaced, as competition from China continues to worry the industry.
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