Stellantis has today pledged to take steps to address problems in North American and elsewhere, including cutting output and prices, after the world's fourth biggest carmaker delivered worse-than-expected first-half results.
Stellantis has a total 20 new models planned for this year and their development has required resources in recent months, investment the company hopes will deliver profitability later this year.
"The company's performance in the first half of 2024 fell short of our expectations," CEO Carlos Tavares said in a statement.
Adjusted operating income (EBIT) fell 40% to €8.463 billion in the half year to June 30.
That was below the €8.85 billion expected by analysts, a Reuters poll showed.
Its Milan-listed shares were down 10% in early trading, hitting their lowest level since August 2023.
Its margin on adjusted EBIT shrunk to just below 10%, slipping below the double digit margin it aims to achieve for the full year.
Stellantis' free cash flow was negative at almost €400m in the first half.
"We are working hard to meet our full-year (adjusted operating income) margin forecast and to deliver positive cash flows in the second half," CFO Natalie Knight told a media roundtable.
Stellantis forecasts include positive industrial free cash flow for the year.
Its said it was taking "decisive actions to address operational challenges" and CFO Knight said that, looking at the second half, the group was taking "the bulls by the horns".
She said measures include inventory reduction and logistics, especially in North America, the group's profit powerhouse.
"(That) is the market that needs the most work and where we are most concentrated when we look at the second half," Knight said.
"There are operational issues we've had in North America where I think we could have performed stronger".
The CFO added the group would reduce production in North America this quarter, as well as prices.
"That's one of the things that is important for us, to calibrate how the supply and demand meet," she said.
Analysts at Citi said in a note they expect Stellantis problems to continue.
"We see no real improvement until and unless Stellantis removes the overhang from inventories – which itself would put pressure on full-year ...margins," they wrote.
Japan's Nissan saw first-quarter profit almost completely wiped out today and slashed its annual outlook, as deep discounting in the US shredded its margins.
