The Stellantis sign is seen outside the FCA Headquarters and Technology Center in Auburn Hills, Michigan, on Jan. 19, 2021.
Jeff Kowalsky Afp | Getty Images
Stellantis on Monday cut its annual guidance for 2024 after a “global industrial” slowdown and strong competition from China, sending Milan-listed shares sharply lower.
The French-Italian conglomerate, known for brands such as Chrysler, Dodge, Jeep and Maserati, warned of lower than expected sales in “many regions” in the second half of the year. It now pencils in an adjusted operating income (AOI) margin of between 5.5% to 7.0% for the full year 2024, down from a “double digit” outlook.
“The deterioration of the global industrial base shows a lower market forecast for 2024 than at the beginning of the period, while the competitive forces are intense due to the increase in industrial supply, and the increasing competition from the Chinese,” the automaker said.
It also lowered its forecast for industrial free cash flow to a range of 5 billion euros ($5.58 billion) to 10 billion euros, from “positive” guidance previously, due to expected lower AOI margins and and high working capital. in the second half of this year.
The automaker also said the revisions to its guidance were “decisions to significantly increase corrective actions for North American performance issues,” but did not provide additional details. Earlier this year, Stellantis was sued by US shareholders who said the company defrauded them by hiding rising stock prices and other factors, Reuters reported.
This month, the Stellantis dealer network in the US criticized CEO Carlos Tavares for the company’s recent decline in sales, reduced factory production, among other decisions they consider harmful to the automaker’s business.
The carmaker’s stock was trading up 12% at 9 am London time.
Stellantis’ profit warning comes after German carmaker Volkswagen also cut its full-year outlook on Friday, now targeting an operating return on sales of 5.6% in 2024, from a range of 6.5-7.0%.
In the filing of the debt translation translated by Google, it indicated that its projections were lowered due to the backlog of its passenger car and commercial vehicle models, as well as the “deterioration of the macroeconomic situation, which creates other risks, especially in the Core product group.”