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Stellantis Lowers Earnings Forecast Amid US Overhaul

Italy’s Stellantis, the world’s fourth-largest carmaker, has revised its earnings forecast downward, citing significant investment needs for its US operations amid an industry slump and rising Chinese competition. Efforts include expediting North American turnaround plans, notably reducing dealer inventory to 300,000 vehicles by year-end, ahead of the previous target in early 2025.
The urgency stems from a dramatic drop in shipments, down 200,000 units compared with last year, doubling earlier predictions. To combat this shortfall, Stellantis plans to offer greater incentives on 2024 and older models. The company also anticipates ending the year with a negative cash flow between 5 billion euros and 10 billion euros, contrasting with earlier positive expectations.
Stellantis, formed from the PSA Peugeot and Fiat Chrysler merger in 2021, downgraded its operating profit margin to 5.5%-7.0% from previous double-digit forecasts. This financial strain has intensified scrutiny from US dealers and the United Auto Workers union, prompting the search for a new CEO to replace Carlos Tavares, although the company insists it’s part of a standard succession plan.
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The carmaker also faces pressure in Italy, with one of its main shareholders calling for action amid production cuts. Italian autoworkers have announced a one-day strike on Oct. 18. Stellantis reported a 48% decrease in first-half net profits compared to last year, with US sales down nearly 16%, despite a 2.4% rise in overall new vehicle sales. (This story was generated by Newser’s AI chatbot. Source: the AP)

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