Stellantis Reports 48% Drop in Profits, Warns of Potential Brand Closures

Introduction

Stellantis, the multinational automaker group that includes Jeep, Dodge, and Fiat, has reported a significant 48% decrease in net profits during the first half of 2024. CEO Carlos Tavares attributes the decline to industry conditions and operational issues within the company. Tavares has also warned that loss-making brands may face closure.

Financial Performance

In the first half of the year, Stellantis experienced a 48% drop in net profits, amounting to $6.07 billion. Adjusted income also declined by $6.18 billion to $9.22 billion. These disappointing results caused the group’s share price to plummet by 8.5%.

Potential Brand Closures

CEO Carlos Tavares has stated that if brands within Stellantis do not generate profits, they may be shut down. Lancia, DS, and Maserati are among the brands that could be at risk. Tavares emphasized the need for profitability and stated that sentimentality cannot be prioritized over financial success.

Challenges and Opportunities

Tavares acknowledged the challenging situation but expressed optimism for the future. Stellantis has initiated a product blitz, planning to launch 20 new vehicles this year. The introduction of Europe’s Lancia Ypsilon and the Hurricane-powered Ram 1500 are expected to improve the company’s performance. Additionally, price cuts will be implemented to enhance competitiveness in the market.

Despite the difficulties, Tavares remains committed to maximizing Stellantis’ long-term potential, particularly in North America. He emphasized the need for significant work to achieve this goal.

Overall, Stellantis is taking corrective measures to address its operational issues while capitalizing on new product launches and cost-cutting initiatives to improve financial performance.