Stellantis, the automobile giant formed by the merger of PSA and Fiat Chrysler, is facing significant challenges in the American market. Indeed, the company has recorded a significant decline in its revenue, down by 14%. This situation raises questions about the strategies to be implemented to reverse the trend and maintain its competitive position in the United States.
Stellantis faces a 14% decline in revenue
After several years of continuous growth thanks to a market premiumization strategy, the car manufacturer Stellantis is experiencing a difficult period. In the first half of the year, the company recorded a 14% decline in its revenue, falling to €85.02 billion.
This significant decrease can be attributed to a complex industrial context and operational difficulties. According to Carlos Tavares, CEO of Stellantis, “the results for the first half of the year are not up to our expectations, reflecting both a difficult industrial context and our operational challenges.”
Maintaining operational margin in a challenging context
Despite this revenue drop, Stellantis managed to maintain a double-digit operational margin in the first half of the year, just reaching 10%. However, this performance remains far from the 14.4% recorded during the same period last year. The net profit also suffered a severe decline, plunging by 48% to €5.6 billion, down from €10.9 billion achieved in the first half of 2023.
Challenges in the North American market
The North American market, essential for Stellantis, is particularly unforgiving. The company’s market share is decreasing, with volume deliveries down by 18%. In Europe, volumes are also experiencing a 6% drop.
To adapt to this context, Stellantis is highlighting significant internal improvements, notably the reduction of direct costs related to materials, labor, and logistics, thereby partially mitigating the revenue decline.
Renewal strategy for the lineup
Stellantis is betting on the renewal of its lineup to reverse the current trend. The group plans to launch twenty new vehicles worldwide starting in 2024, with new versions of the Peugeot 3008 and 5008, as well as the Citroën C3, among other models. The aim is to revitalize consumer interest and regain lost market share.
Outlook and objectives
Despite disappointing results in the market, Stellantis maintains a positive outlook. The company is keeping its financial targets for the year, aiming for a positive industrial free cash flow and an operational margin of at least 10%. The leaders are confident in their ability to overcome current challenges through the new strategies implemented.
- Launch of twenty new models in 2024
- Continued reduction of direct costs
- Maintaining operational margin objectives
