stellantis closes on third quarter of 2024 with numbers well below expectations: the revenues drop by 27%, reaching 33 billion euros compared to the previous year and the deliveries have suffered a decrease of 20%, equal to 1,148 million units, with 279 thousand fewer vehicles delivered. According to the company, the crisis was accentuated by the planned reduction of inventories in the United States and the difficult European context, where logistical and quality challenges have postponed the launch of key models. Doug Osterman, the new CFO during the call with analysts, admitted that the results are below the group's potential, but underlines the progress in inventory management and in the stabilization of the American market. In Europe, stringent regulations have slowed the launch of strategic products, but the group is counting on a revival thanks to the new launches scheduled for 2025. These factors, together with the stability of the 2024 estimates, although previously reduced, have Stellantis title pushed up 1,4% on Piazza Affari.
Furthermore, the program of 3 billion share buyback was completed in October (including 0,9 billion in the third quarter), returning 7,7 billion to shareholders in 2024.
Inventories Reduction in the US
In response to the slowdown in the US market, the Italian-French automotive giant reduced its total inventory to 1,33 million units as of September 30, down 129 units since the beginning of the year. In the US, the inventory level was reduced by more than 80 units between June and October, with the aim of an overall reduction of 100 units by the end of November, as confirmed by the CFO: “We certainly still have some work to do, but we are on track to reduce US dealer inventories by 100 units in 2024. We had announced that we would reduce inventory by the end of the year to 330 units and we remain very confident that we can do so before the end of November,” explained Ostermann, trying to reassure investors.
Stellantis confirms (already cut) 2024 guidance
As the European automotive sector wrestles with new challenges – from the transition to electric vehicles to managing supply chains – Stellantis is looking to restructure its operations globally, slashing outdated models and adapting its portfolio to a rapidly evolving market. The auto giant, which maintains its Financial guidance for 2024 updated downwards in September, remains optimistic about the recovery, counting on a wave of new launches in 2025. In detail, the Italian-French giant expects a cut in operating margin from 10% to 5-7% and a revision of industrial free cash flow to -5/-10 billion (from positive to negative). The company announced that, by early 2025, "a consistent capital policy will support the calibration of dividends and buybacks".
However, the real challenge for the group remains the redefinition of relations with Italian institutions in a period in which industrial policy increasingly seems to be a critical issue for the sector.
Elkann and Parliament: open clash
In addition to the drop in revenues, Stellantis is facing the political criticism. Ecosystem's staff is President John Elkann refused a parliamentary hearing, justifying that "there is nothing to add" after the intervention of CEO Carlos Tavares on October 11. This refusal has sparked a fiery reaction from Parliament, with the League and Brothers of Italy calling it “a disrespectful act”. Giorgia Meloni also rejected Elkann’s move and, according to rumors, the Quirinale would be “irritated”. “He disrespected Parliament,” the prime minister said on TV. “He is missing some fundamentals, the Chambers are different from the government”. And then, the one with Stellantis “is a dialogue that we will continue to have without subservience and without conditioning”.
In a subsequent telephone call with the Speaker of the House Lorenzo Fontana, Elkann reiterated "respect and openness to dialogue", adding that the no was born from the desire to respect the mandate of the Chamber to the government to outline an industrial policy for the sector. He also recalled the Investments of 2 billion per year in Italy from 2021, without making predictions about the future.
Meanwhile, the Budget Law provides a reduction of 4,6 billion for the Automotive Fund, a measure that is causing alarm among unions and companies. The sector is reporting a gloomy 2024, with a 32% drop in turnover and orders down 40% on the domestic market.
