Auto and cars

Stellantis lowers earnings forecast amid turnaround efforts and industry challenges

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Stellantis (NYSE:STLA), the world’s fourth-largest carmaker, revised its earnings forecast downward on Monday, citing significant investments to revamp its U.S. operations and challenges posed by increased competition from Chinese automakers.

The company announced it would accelerate its turnaround strategy for North America by reducing dealer inventory to a maximum of 300,000 vehicles by the end of this year, rather than the previously set target of the first quarter of 2025.

This decision follows a decline in vehicle shipments, with 200,000 fewer units delivered in the second half of 2024 compared to the same period last year—double the expected decrease.

Additionally, Stellantis plans to offer higher incentives on 2024 and older models to boost sales.

In a profit warning, Stellantis projected a negative cash flow between 5 billion and 10 billion euros ($5.6 billion to $11.2 billion) by the end of the year, reversing earlier expectations of a positive outcome.

The automaker also revised its operating profit margin guidance to a range of 5.5% to 7%, down from the previously expected double-digit margins.

 

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