Stellantis Sees Revenue and Shipments Drop in Q3 2024

Stellantis faced a notable setback in the third quarter of 2024 as revenues fell 27% compared to last year. As Stellantis pushes through a challenging year, the company reported $35.8 billion (€33 billion) in revenue and confirmed a 20% decline in global shipments, down to 1.1 million units, echoing predictions made earlier this month.

The impact was most significant in North America, where revenue fell by 42% to $13.5 billion (€12.4 billion) as shipments dropped 36% to 299,000 units. North America is a critical market for Stellantis, and the steep drop reflects a combination of inventory adjustments, discontinued models, and ongoing operational shifts. Doug Ostermann, the new Chief Financial Officer (CFO), summarized the results, saying, “This performance is certainly not where we want to be,” acknowledging that the company has been navigating what he termed a “transition year.”

Inventory Reduction Efforts and Quality Prioritization –

In recent months, Stellantis has concentrated on reducing its U.S. dealer inventories. The company expects inventories to shrink to under 350,000 vehicles by the end of October, down from 431,000 in June. The target is to reach 330,000 units by November, a move aimed at better-aligning production with market demand. “We now have a line of sight to achieve the 100,000 (vehicle) reduction sometime in November,” Ostermann explained. He also highlighted an upcoming shift in December toward “stronger plant utilization,” which could stabilize production levels and potentially help avoid further layoffs.

Stellantis is aiming to emphasize quality over speed in its new model launches as a primary strategy for long-term improvement. Ostermann stressed, “Quality over timing is key for reducing warranty costs and ensuring a better customer experience.” This shift aligns with Stellantis’ strategy to offer more flexible platforms that support electric, hybrid, and traditional gas-powered vehicles, designed to adapt to various market preferences as consumer demand for electric vehicles (EVs) remains unpredictable.

Regional Impacts: From Europe to Asia-Pacific – 

While North America faced the largest hit, other regions also felt the strain. Revenue from Europe, Stellantis’ second-largest market, dropped 12%, and the Middle East and Africa recorded a 37% decline. In Asia-Pacific, where Stellantis has been working to strengthen its presence, revenue fell sharply by 40%. South America, however, saw only a slight revenue dip of 2%, indicating some stability in that market. Even Maserati, Stellantis’ luxury brand, experienced a substantial 61% revenue drop, indicating that the premium segment is not immune to these shifts.

EV-Focused Lineup: A Mixed Blessing? – 

Stellantis has planned 20 new product launches by the end of the year to bolster its presence in the U.S. market. High-profile entries include the electric Dodge Charger Daytona, Jeep® Wagoneer S, Ram 1500 REV, and the Ram 1500 Ramcharger—a range-extended version aimed at extending EV driving capabilities. While these models are expected to generate excitement, they’re entering a complex U.S. market with inconsistent EV demand. However, Stellantis’ strategy involves “multi-energy platforms,” which can accommodate electric and gas-powered vehicles, adding flexibility to meet shifting consumer interests.

Revenue Guidance and Financial Adjustments –

Despite these headwinds, Stellantis has reaffirmed its reduced financial guidance for the year, aiming for an adjusted operating income margin of 5.5% to 7% and projecting a negative cash flow of up to $10.8 billion (€10 billion). Ostermann commented on the challenging cash flow position, calling it “unacceptable,” but emphasized Stellantis’ “strong balance sheet” to help weather current difficulties. Meanwhile, Stellantis completed a $3.36 billion (€3 billion) stock buyback program in October, bringing total shareholder returns in 2024 to $8.4 billion (€7.7 billion), which was met with approval by shareholders.

Looking Forward: Price Adjustments and Strategic Shifts –

As Stellantis navigates these pressures, the company has outlined additional steps to boost vehicle sales, including planned price reductions for several Jeep models for 2025. These adjustments and heightened marketing efforts aim to attract more buyers in the competitive North American market.

“We are grinding through a transition year,” Ostermann concluded during a webcast with investors, highlighting Stellantis’ commitment to stabilizing its U.S. inventory and preparing for more aggressive growth in 2025. Stellantis’ stock responded favorably, rising 2.61% to $13.58 early Thursday, though still well below its peak of over $29 per share in March 2024.

The automaker’s leadership, including the newly appointed Chief Operations Officer (COO) for North America Antonio Filosa, will continue to streamline inventory and launch new models designed to match market demand while balancing investments in EVs against traditional and hybrid offerings.

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