New Jeep vehicles are displayed on the lot of a Dodge Chrysler-Jeep Ram dealership in Miami, Florida on October 3, 2023.
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Auto giant Stellantis reported a pointy decline in first-half net profit on Thursday, citing lower sales, temporary production gaps and a smaller market share in North America.
The company, which owns well-known brands equivalent to Jeep, Dodge, Fiat, Chrysler and Peugeot, reported net profit of 5.6 billion euros (6.07 billion dollars) for the primary half of the yr, down 48% from the identical period in 2023.
Stellantis’ adjusted operating profit for the primary six months of 2024 was €8.5 billion, down €5.7 billion from the previous yr, mainly as a consequence of declines in North America.
Stellantis shares, listed on the Milan Stock Exchange, fell by around 8.5 percent on Thursday.
“The company’s performance in the first half of 2024 fell short of our expectations, reflecting both a challenging industry context and our own operational issues,” Stellantis CEO Carlos Tavares said in an announcement.
In an interview with the media, Tavares said that lots of the company’s problems were as a consequence of its US operations, which he previously said were hampered by “arrogant mistakes” regarding vehicle inventory levels, manufacturing problems and sales strategies.
He reiterated those issues on Thursday, saying Stellantis continues to be working to repair lots of the U.S. problems. Tavares dismissed the corporate’s massive cost-cutting efforts as resulting in the issues. Several executives had previously described the cuts to CNBC as starting from grueling to excessive.
“The local team is required to deliver profit, share and customer satisfaction,” Tavares said. “If they don’t deliver for some reason that I can understand and help correct, they may want to create a scapegoat. The budget cut is simple. It’s wrong.”
The company’s U.S. sales fell about 16% in the primary half of the yr after Stellantis was the one major U.S. automaker to report a decline in sales last yr in comparison with 2022.
The company’s North American market share was 8.2% in the primary half of the yr, a decrease of 1.8 percentage points.
Despite the continued problems, Stellantis reiterated its 2024 guidance, which calls for a double-digit adjusted operating profit margin, positive industrial free money flow and a return of capital to investors in the shape of dividends and buybacks.
Tavares expects to attain those goals by introducing 20 latest models this yr, fixing problems within the U.S. and making additional price cuts to spice up sales. He also didn’t rule out further job cuts.
“This is a very tough industry, a very tough time, and everyone has to fight to perform,” he said. “We’re going to have to work hard to deliver that performance.”
Stellantis’ results follow closely on the heels of second-quarter results from U.S. automakers General Motors and Ford Motor.
GM raised several key financial targets on Tuesday after the corporate comfortably beat Wall Street’s earnings expectations, while Ford reported a decline in adjusted profit on Wednesday, disappointing investors.
Stellantis, for its part, recorded net sales of 85 billion euros in the primary half of the yr, a decrease of 14% in comparison with the identical period last yr.
