Stellantis, the automotive giant behind brands like Chrysler, Dodge, Jeep, and Maserati, has issued a profit warning, resulting in a 12% drop in its shares on the Milan stock exchange. The company cites weaker-than-expected sales across most regions for the latter half of 2024 as the primary reason for this adjustment.
Key Details:
Revised Financial Outlook:
- Stellantis now anticipates an adjusted operating income (AOI) margin of 5.5% to 7.0% for the full year, down from an earlier “double-digit” forecast.
- Industrial free cash flow projections have been downgraded to between minus 5 billion euros ($5.58 billion) and minus 10 billion euros, shifting from a previously positive outlook.
Industry Dynamics:
- The company attributes the revisions to deteriorating global industry conditions and intensified competition, especially from Chinese manufacturers.
- The market forecast for 2024 has worsened since the beginning of the year, affecting industry supply and demand dynamics.
Internal Challenges:
- Stellantis is expanding its remediation actions to address performance issues in North America, although specific details have not been disclosed.
- Earlier this year, shareholders in the U.S. sued Stellantis, alleging the concealment of rising inventories and other issues.
Additional Industry Impact:
- This announcement follows a similar profit warning from Volkswagen, which also reduced its annual outlook due to macroeconomic challenges and internal brand performance issues.
The company is under scrutiny as its U.S. dealer network criticizes CEO Carlos Tavares for decisions perceived as harmful to sales and production. As Stellantis navigates these challenges, stakeholders remain watchful of its strategic responses and market performance in the coming months.
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