Earnings reduced by half in the first half of 2024 due to declining sales in North America. The group seeks to revive itself with new models and strategies.
Stellantis: profit plunge and sales decline in North America
The automobile powerhouse, which has always focused heavily on the U.S. market, reported a 48 percent decline in profit for the first half of 2024. This is a major blow for a group that aspired to dominate the North American market.
Stellantis, the automotive giant we all know from the merger of Fiat Chrysler Automobiles and PSA Group, experienced a significant slowdown in sales in the first six months of 2024. The half-year results, which were released recently, showed a significant drop in net profits, which were found to have halved compared to the same period last year. The primary cause of this wholly disappointing and unexpected performance is to be found particularly in the North American market, where sales were certainly lower than expected.
The United States market had traditionally been highly strategic for the group; now, however, it has turned out to be a real “black hole” for Stellantis. The data that was recorded clearly showed a 48 percent drop in net profits, which is largely attributed to the disappointing results that were achieved overseas. Several factors affected the overall performance, including the reduction in inventories. The group has implemented a number of initiatives aimed at containing inventory levels as much as possible, resulting in declines in sales. Another negative contributing factor has been production disruptions. Indeed, it appears that the transition to a new generation of models has involved mandatory halts in production, and because of this, sales volumes have been adversely affected. Another aspect taken into consideration was the loss of market share. Particularly with regard to North America, Stellantis saw its market share gradually decline in the face of increasingly fierce competition.
CEO Tavares announces action plan to revive sales
With these results achieved in mind, CEO Carlos Tavares admitted that the company’s performance was generally below the set expectations. However, he also stressed the need to continue to look to the future with optimism and to take measures that are corrective in order to revive sales, especially in the United States.
As part of this, to try to revive the group’s fortunes, Stellantis has announced a plan to launch new models, which will be designed to fill gaps in the current lineup and consequently capture new market segments. Among the most anticipated new products are Peugeot 3008 and 5008, Lancia Ypsilon, Maserati Grecale Folgore, Ram 1500, and Citroën Basalt.
The global automotive market, as we know, is going through a phase of great transformation. A change that is characterized above all by the increasing electrification and by the digitalization now present everywhere. Stellantis is fully aware of the situation that needs to be faced, and is working to precisely seize the opportunities offered by this new scenario that has arisen. Obviously, the results obtained in the first half of 2024 are not at all satisfactory for an automotive group of the caliber of Stellantis, especially for a market such as North America. This is a wake-up call that forces the company to increase the quality of its work in order to keep up with the advancing times.