Big drop in Stelantis profits

Big drop in Stelantis profits

The American-European consortium of car manufacturers Stelantis announced a big drop in profits in the first half of this year due to a decrease in sales in Europe and North America and difficulties in car production.

Net profit was halved in the first half of this year, mainly due to weaker sales and restructuring costs, writes the AP agency.

The carmaker formed in 2021 by the merger of Fiat-Chrysler with PSA Peugeot reported a net profit of 5.6 billion euros in the first six months of this year, down 48 percent from 11 billion euros in the same period of the same year.

Revenues in that period fell by 14 percent to 85 billion euros.

Stelantis is the majority owner of the car factory in Kragujevac, while the minority share is owned by the Republic of Serbia, based on the strategic partnership agreement signed by the Government of Serbia with Italian Fiat in 2008.

The large drop in the half-year results is mainly the result of a decrease in reductions in Europe, but also in North America, which brings the most money to the group, and where its share fell, the management announced.

Hope in 20 new models

“The company’s results in the first half of 2024 are not up to our expectations, and reflect the difficult industrial context and our operational difficulties,” CEO Carlos Tavares said in a group statement.

He said the problems were being resolved and expressed hope that the launch of 20 new models this year would improve profits.

Tavares has previously expressed dissatisfaction with the performance of some American factories, citing accumulated inventories of finished vehicles and a “suboptimal” marketing strategy.

The management pointed out that 2024 is a “transitional year” before the expected strong jump with new car models.

The group also faced competition that has an aggressive pricing policy and intends to revise its tariffs and promotions especially in the US.

Stelantis designs, manufactures and sells cars of 14 brands: Abarth, Alfa Romeo, Chrysler, Citroen, Dodge, DS, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram and Vauxhall. At the time when this group was formed, it had 300,000 employees, sales in more than 130 and production in 30 countries.

Source: Beta

Photo: screenshot, Beta/AP