Stellantis Faces Earnings Decline, CEO Promises Action

Stellantis CEO Carlos Tavares announced plans to address significant challenges in North America following a stark decline in the company's first-half earnings. The automaker, formed from the merger of Fiat-Chrysler and PSA Peugeot in 2021, reported a 48% drop in net profits, totaling 5.6 billion euros ($6 billion), compared to 11 billion euros in the same period last year. Revenues also fell by 14%, reaching 85 billion euros, as the company grapples with lower sales and restructuring costs. Tavares acknowledged that the company's performance did not meet expectations, attributing the downturn to both a difficult industry landscape and internal operational issues. He expressed optimism that the launch of 20 new vehicles this year could help improve profitability. However, he highlighted North America as a critical area requiring substantial improvement, particularly in inventory management and market share, which have been declining. The CEO noted that Stellantis has struggled with excessive inventory levels in the U.S., leading to longer sales times and higher sticker prices compared to competitors. In June, vehicles took an average of 97 days to sell on dealer lots, the highest in the industry. Tavares indicated that while inventory issues in Europe have been resolved, similar problems persist in the U.S., and he is hopeful for better outcomes in the upcoming months. As the global auto industry faces pressures from consumer demand for affordable vehicles and the need for increased capital investment in electric and gas-powered models, Tavares remains committed to navigating these challenges effectively.