Carmaker Stellantis cuts forecasts amid industry collapse and Chinese competition

MILAN (AP) – Automaker Stellantis, the world’s fourth-largest automaker, lowered its earnings forecast on Monday, citing investments to turn around its U.S. operations amid a broader industry downturn and increased Chinese competition.

Stellantis said it is accelerating efforts to turn things around in North America, including increasing dealer inventory levels to no more than 300,000 vehicles by the end of the year, instead of the first quarter of 2025 as previously planned.

The move comes as deliveries fell by 200,000 vehicles in the second half of this year compared with the previous year, twice the company’s forecast. The company will offer higher incentives for 2024 and older models.

In its earnings warning, Stellantis said it expected to end the year with negative cash flow of 5 billion to 10 billion euros ($5.6 billion to $11.2 billion), rather than positive.

The automaker, which was formed in 2021 through the merger of PSA Peugeot with Fiat Chrysler Automobiles, also lowered its operating profit margin forecast to 5.5% to 7.0% instead of double digits.

The struggling Jeep and Ram automaker is looking for a new CEO to replace Carlos Taveres, who has been under fire from U.S. dealers and the United Auto Workers union after dismal first-half financial results. The company presented the search as a normal leadership succession plan.

Stellantis is also under pressure in Italy, where it has one of its main shareholders, due to production cuts. Autoworkers announced a one-day strike on October 18.

The company said first-half net profits fell 48% compared to the same period last year. First-half sales in the United States fell nearly 16%, even as overall new vehicle sales rose 2.4%.