Stellantis workers work at Stellantis Group’s new eDCT assembly plant for hybrid and plug-in hybrid vehicles in Turin, Italy, on April 10, 2024.
Stefano Guidi | Getty Images News | Getty Images
Auto giant star It reported a 27% drop in third-quarter net income on Thursday but said it was making progress in resolving operational issues such as U.S. inventory.
The Netherlands-based company, which owns household names such as Jeep, Dodge, Fiat, Chrysler and Peugeot, said it had net revenue of 33 billion euros ($35.8 billion) in the July-September period. Analysts had expected third-quarter net revenue of 36.6 billion euros, according to a consensus compiled by LSEG.
The company attributed the decline primarily to “lower shipments, unfavorable mix, and pricing and foreign exchange impacts.”
The company said it plans to deliver about 20 new models this year, adding that it has made good progress in reducing bloated inventory, especially in the United States.
Its total inventory fell by 129,000 vehicles between January and September to 1.3 million vehicles. The automaker noted that U.S. dealer inventories fell by 80,000 vehicles between June 30 and Wednesday. Stellantis said it will achieve its goal of reducing its holdings by 100,000 shares by the end of November.
Stellantis Chief Financial Officer Doug Ostermann acknowledged that the quarterly results were “below our potential” but said U.S. inventories had been “significantly reduced” and would meet the company’s targets.
“In Europe, stringent quality requirements have delayed the launch of some high-volume products, but as progress is made in resolving the challenges, we will soon benefit from our next wave of new products in Europe,” he said in a statement on Thursday. Significantly expanded reach in 2025 and beyond.
The transatlantic automaker issued a profit warning in late September, lowering its annual guidance amid worsening “global industry dynamics” and a push to expand remedial actions targeting performance issues in North America.
Shares in Milan-listed Stellantis were down more than 42% so far this year, but were up 1% on Thursday morning.
American car brands Jeep, Ram, Dodge and Chrysler have been struggling under European owners. According to Cox Automotive, Stellantis has the highest dealer inventory of any brand in the U.S., indicating less consumer demand for the product.
According to CNBC, Stellantis is currently suing the United Auto Workers union over the strike threat, escalating a long-running battle between the automaker and U.S. unions.
Like many in the auto industry, Stellantis has been grappling with a number of challenges on the road to full electrification, including weak global electric vehicle (EV) demand and competition from China.
The pressure on European carmakers will increase further when emissions reduction targets come into effect next year. Against this backdrop, automakers are keenly aware of the need to boost sales and have recently launched a series of low-cost electric vehicle models.
—CNBC’s Robert Ferris contributed to this article.
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