The automaker is issuing an alert on its results for the 2024 financial year, anticipating an operating margin between 5.5% and 7% instead of previous double-digit forecasts.
Since its creation almost four years ago, the group Stellantiswhich brings together around fifteen automobile brands including Chrysler, Citroën, Fiat, Opel and Peugeot, has had prosperous years, but the clouds have been gathering for several months to the point that the automobile giant was forced yesterday to issue a alert on its results, as several manufacturers have done recently, particularly German ones.
© Stellantis
For Stellantis, the fix is severe. In a press release, the group indicates that it is targeting a current operating margin of between 5.5% and 7% for the 2024 financial year, instead of a double-digit margin previously planned. The group specifies that approximately “two thirds of the reduction in operating margin is attributable to corrective actions in North America”while “Other factors contributed a third, including lower-than-expected second-half sales in most regions”.
And while it initially forecast positive cash flow for the 2024 financial year, Stellantis now estimates that it will dip into its cash flow to the tune of 5 to 10 billion euros this year, due to the “prospect of a significantly lower current operating margin” and the impact of a “working capital temporarily high in the second half of 2024”.
According to the group, the downward revision of its 2024 financial objectives takes into account the decision to significantly amplify the actions undertaken to correct performance problems in North America, as well as the deterioration in the dynamics of the global automotive sector.
The corrective actions that Stellantis is evoking in the United States aim to accelerate the plan to normalize stock levels, so as not to exceed 330,000 vehicles in dealerships at the end of 2024, instead of the initial objective which set the deadline in the first quarter of 2025. The actions include in particular a drop in network sales in North America of more than 200,000 vehicles in the second half of 2024 (compared to 100,000 according to previous forecasts) compared to the same period of the previous year, an increase in promotions on vehicles from model years 2024 and earlier (which the group had refused to do until then), and productivity improvement initiatives that encompass both cost adjustments and of capacity.
More generally, Stellantis deplores “a deterioration in the global automotive context, marked by a 2024 market forecast down compared to the start of the year, even though competition has intensified due to the increase in supply and increased competition increased Chinese ».
Since the announcement of this results alert yesterday, Stellantis shares have fallen by 14% to settle today, at 12 p.m., around €12.5.
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