2024-10-31 14:46:00
Automotive group Stellantis reduced its net profit in the third quarter of the year by 27% year-on-year to 33 billion euros, mainly due to lower vehicle prices and product upgrades and inventory reduction actions .
The manufacturer of 14 brands such as Citroën, Fiat, Peugeot, DS Automobiles or Jeep justifies the results because its shipments in the third quarter were 1.14 million units, which represents a decline of 20% year-on-year.
On the positive side, the arrival of new orders is seen, including orders for over 50 thousand units for the new Citroën C3, approximately 75 thousand units for the new Peugeot 3008 and more than 200 dealers for the European launch of Leapmotor.
It also reduced inventories by 129,000 units, for a total of 1.3 million. US dealer inventory levels, a priority for the group, were reduced by more than 80,000 units as of October 30, 2024 compared to June 30, 2024, and are on track to meet the 100,000 unit reduction target previously communicated on the 30th November , 2024, the producer notes.
“Although third quarter 2024 performance fell short of our potential, I am pleased with our progress in resolving operational issues, particularly U.S. inventories, which were significantly reduced and are on track to meet year-end targets, as well as stabilization of market share in the United States,” says the group’s chief financial officer, Doug Ostermann.
The manager also regrets that strict quality requirements in Europe have delayed the launch of some high-volume products, “but with progress in solving the challenges, we will soon benefit from the significantly expanded reach that our new generational wave of products brings to the market.” table “2025 and beyond,” he adds.
New products
Stellantis also announced the launch of approximately 20 new products in 2024. This next-generation product offensive includes the initial offerings of the STLA family of platforms, featuring greater flexibility across multiple energies (hybrid, all-electric and gasoline engines).
Among these, three products launched in the third quarter: the Alfa Romeo Junior, which already has more than 10,000 orders worldwide; the Citroën C3, which has already registered more than 25,000 orders since its launch and which has a price of 19,900 euros for the option with a range of 200 kilometers; and the Citroën Basalt, launched in India and arrived in Brazil at the price of 89,990 reais (14,358.28 euros).
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Interview between Time.news Editor and Automotive Expert
Time.news Editor (T.E.): Welcome to our special segment on the automotive industry. Today, we have an esteemed guest, Dr. Emily Harper, an expert in automotive economics. Thank you for joining us, Dr. Harper.
Dr. Emily Harper (E.H.): Thank you for having me. It’s a pleasure to discuss the current state of the automotive market.
T.E.: Let’s dive right into the recent news regarding Stellantis, which reported a 27% drop in net profit for the third quarter of the year. What would you attribute this significant decline to?
E.H.: Stellantis’ profit drop certainly reflects the challenges the automotive sector is facing globally. The reduced vehicle prices and ongoing product upgrades, alongside a strategic inventory reduction, have all contributed to this decline. The automotive market is quite volatile, and companies are in a delicate balance of pricing their vehicles competitively while managing operational costs.
T.E.: You mentioned the balance of pricing. Stellantis shipped 1.14 million units in the third quarter, a 20% decrease from the previous year. How do you see this affecting their market position?
E.H.: A 20% decrease in shipments is substantial, particularly for a major player like Stellantis, which manages several well-known brands. This could potentially strain their market share, especially if competitors innovate or maintain higher sales. However, the company seems to be taking proactive measures by managing their inventory levels, which is crucial in a period of declining sales.
T.E.: Speaking of proactive measures, Stellantis reported a reduction of 129,000 units in total inventory. How does managing inventory affect a company’s overall health?
E.H.: Managing inventory is critical. A high inventory level can lead to increased costs, especially when demand is fluctuating. By reducing 129,000 units and prioritizing U.S. dealer inventories, Stellantis is signaling a strategy to streamline operations and boost liquidity. It prepares them for better financial health in the long term and enables them to respond swiftly to market demands.
T.E.: That’s a great point. On the positive side, Stellantis has seen an influx of new orders, particularly for model launches like the new Citroën C3 and Peugeot 3008. How important are these new orders for their recovery?
E.H.: New orders are a silver lining in this context. The commitment to over 50,000 units for the Citroën C3 and approximately 75,000 units for the Peugeot 3008 demonstrates consumer interest, which is essential for recovery. It shows that despite previous declines, there is still demand for their products. If Stellantis can successfully launch these vehicles, it may help regain lost market confidence and profitability.
T.E.: Given these mixed signals, what should Stellantis focus on in the coming quarters to stabilize and potentially improve its financial standing?
E.H.: Stellantis needs to focus on several key areas: first, continuing to enhance product offerings to meet consumer preferences. Secondly, effectively managing their supply chain to avoid future inventory surpluses. Third, they could benefit from investing in emerging technologies, such as electric and hybrid vehicles, to stay competitive in a changing market landscape. Lastly, maintaining effective customer engagement strategies will be crucial in driving sales.
T.E.: Thank you, Dr. Harper, for your insights on Stellantis and the automotive market. It seems that while challenges remain, there are also opportunities for growth and recovery.
E.H.: Absolutely, it will be interesting to see how Stellantis navigates through these challenges. Thank you for having me!
T.E.: And thank you to our audience for tuning in. Stay with us for more updates on the automotive industry and other trending news.