Et Stellantis has posted its warnings. The world’s fourth largest automobile manufacturer (Peugeot, Fiat, Chrysler, etc.) admitted on Monday September 30 that it will not reach, in 2024, the operating margin of 10% promised by its general director Carlos Tavares: it will rather be between 5, 5 and 7%.
Read also | Article reserved for our subscribers Why Stellantis is bringing Chinese carmaker Leapmotor into Europe
Add to your selections
Two explanations for this major departure from the track. On one side “actions taken to correct performance problems in North America”in other words production cuts and promotions to sell off stocks of Jeep and other Dodges, will weigh on profitability. On the other, the “deterioration in the dynamics of the global automotive sector” is confirmed. The warning caused the stock price to plunge by almost 15% on Monday. The stock price has halved in six months.
Behind the difficulties of the automobile industry, also encountered at Volkswagen or Aston Martin, there is of course fierce competition from Chinese manufacturers. But we must also not forget that the auto manufacturers had taken advantage of post-Covid inflation to boost their profits. Now that the inflationary tide is receding, their margins are deflating.
Surfing on shortages
A true champion of “greedflation” – inflation born from corporate greed – Stellantis was able to surf on the shortages linked to the breakdown of global supply chains to promote the sale of its models. “all options” at the salty price. This strategy, combined with ruthless cost control, allowed it to record, in 2023, a net profit of 18.6 billion euros, the second highest in the CAC 40 behind that of TotalEnergies.
Also read the decryption | Article reserved for our subscribers Carlos Tavares’ merciless cost hunt at Stellantis
Add to your selections
Would this superprofit, and that of other dashing multinationals, have justified an exceptional tax in the name of national solidarity as the opposition demanded? The government did not move in the name of the dogma of fiscal stability. Faced with the slippage in public accounts, Prime Minister Michel Barnier is now considering a temporary surcharge on the profits made in France by large groups.
The warning from Stellantis serves as a reminder that, against a backdrop of disinflation, such a contribution will not reach the full potential of 2023. As for the tax mentioned on share buybacks, if it does not apply from 2024 , it risks only catching exhaust fumes. In matters of taxation and stock trading, timing is everything.
