Dive Brief:
- Stellantis’ net profits for the first half of the year were 5.6 billion euros (nearly $6.1 billion) — down 48% year over year — as it struggled in North America, according to its earnings report released Thursday. The automaker’s adjusted operating income margin decreased to 11.4% and its market share dropped to 8.2% on the continent.
- During the company’s earnings call, CEO Carlos Tavares blamed the results on three headwinds: high expenses, operational flaws and ineffective marketing tactics.
- “It is an understatement to say that H1 2024 results were disappointing and humbling,” Tavares said. “This is a bump on the road that we are now fixing and that we are going to fight against to make sure that we can rebound from here and that we fix the operational issues that we face.”
Dive Insight:
Tavares called North America the company’s top region of concern. He noted that Stellantis is in the midst of a transitional period as it introduces new electrified technologies and models while discontinuing others, such as the Jeep Renegade and Cherokee and Dodge Charger and Challenger. As a result, the automaker had a minimum of 100,000 fewer shipments in June.
North American net revenues were 38.5 billion euros in the first half, a roughly 16.5% decrease from nearly 46 billion euros YoY. At the end of June, Stellantis had 94 days’ supply in the market compared to the industry average of 74 days’ supply, according to Cox Automotive.
In the coming weeks, Tavares said he’ll visit his teams in the U.S. to find the “most appropriate reaction to the inventory problem that was fixed in Europe but not in the U.S.”
“So we see that we are having an abnormal number of prospects that are opting out of the purchase funnel at the beginning of the journey because we are not bringing the sweetener strong enough and soon enough in the process to keep them engaged. That's an obvious flaw,” he said during the call.
Stellantis has additionally hired new leadership in North America to turn the business around. During the first half, the company named a new North American COO, new CEOs for Jeep, Dodge and Ram, and a new marketing lead.
