Stellantis Slashes 2024 Profit Margin Guidance to 5.5% Amid Aggressive US Inventory Cuts

Transatlantic automaker Stellantis NV issued a major profit warning on Monday, sharply downgrading its full-year 2024 financial outlook. Citing aggressive corrective actions to remediate performance issues in North America alongside weakening demand in Europe, the parent company of Jeep, Ram, Dodge, Chrysler, Peugeot, and Fiat reduced its adjusted operating income (AOI) margin guidance from a previous double-digit forecast to between 5.5% and 7.0%.

The multinational manufacturer also reversed its cash generation expectations, projecting industrial free cash flow between negative €5 billion and negative €10 billion for 2024, down dramatically from previous guidance that had anticipated positive cash flow generation. The company noted that roughly two-thirds of the operational margin reduction stemmed directly from corrective measures in the United States.

Severe North American Inventory Bloat Forces Production Curtailments

To resolve a severe buildup of unsold vehicles across its US dealership network, Stellantis accelerated planned production cuts. The group confirmed it will reduce vehicle shipments to North American dealers by more than 200,000 units during the second half of 2024—double the 100,000-unit reduction previously signaled—aiming to reduce dealer lot inventories to under 330,000 units by the end of the year.

In addition to throttling factory assembly lines, Stellantis is deploying substantial marketing subsidies, cash rebates, and promotional incentives on remaining 2024 and 2025 model-year vehicles. The aggressive discounting aims to regain lost market share from domestic rivals General Motors and Ford, which have outpaced Stellantis in consumer retail sales throughout the year.

“We are aggressively tackling operational imbalances in our North American network. Reducing dealer inventory to 330,000 units by year-end is vital to reset our competitive foundation.” — Carlos Tavares, Chief Executive Officer of Stellantis

European Headwinds, EV Transition Friction, and Investor Reaction

The revision reflects wider structural malaise across the global automotive sector. Sluggish consumer adoption of electric vehicles, intense pricing competition from Chinese automakers in international markets, and deteriorating consumer purchasing power have already forced European peers Volkswagen, BMW, Mercedes-Benz, and Aston Martin to downgrade their annual earnings forecasts in recent weeks.

Following the announcement, Stellantis shares plummeted by more than 13% in morning trading on Euronext Paris and Milan. The steep sell-off intensifies pressure on Chief Executive Carlos Tavares from dissident dealership councils, institutional investors, and the United Auto Workers (UAW) union, which had previously threatened strike action over stalled factory investments.

Sources

• Stellantis NV Investor Relations
• Euronext Paris