Stellantis revenue drops across globe, but hardest regional decline was in North America

Stellantis saw its revenues drop 27% in the third quarter across the globe compared with the same period a year ago as the automaker worked to address a variety of challenges, particularly its hefty inventory numbers in the United States.

A decline wasn’t unexpected, as the automaker had released an estimate two weeks ago of its shipments, which were down everywhere but in South America, but the revenue drop hit every region and the company’s luxury Maserati brand. The company reported global revenues of $36 billion (33 billion euros) for the quarter and consolidated shipments of 1.1 million units, down 20%, which mirrored the forecast.

Stellantis, unlike its Detroit Three competitors, releases full earnings reports only for the first and second half of each year, so the results released Thursday don’t show how profitable the automaker was. For the quarter, Ford reported adjusted operating earnings of $2.6 billion, up 18%, and General Motors reported adjusted earnings before interest and taxes of $4.1 billion, up 15.5%, according to prior Free Press reporting.

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Among Stellantis’ regions, North America had the steepest revenue decline, down 42% to more than $13 billion (12 billion euros), compared with the same period in 2023. The official tally on shipments was a 36% decline to 299,000 units.

As for net revenues in the other regions, enlarged Europe was down 12%, Middle East and Africa had a 37% drop, South America declined 2%, China, India and Asia-Pacific fell 40% and Maserati, which is typically reported with the company’s regions, fell 61%.

The company, which owns the Jeep, Ram, Chrysler, Dodge and Fiat brands, said it also reaffirmed its previously reduced financial guidance for the year, with an adjusted operating income margin of 5.5 to 7% and industrial free cash flows down more than $5 to $10 billion (5 to 10 billion euros).

Doug Ostermann, who was named as chief operating officer a few weeks ago in a management shakeup, noted the impact of what he called temporary operational issues and said the company is positioned to absorb what is likely to be a “negative cash flow this year.”

“We fundamentally have a strong balance sheet,” he said.

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In its news release, the company noted that its stock buyback program of more than $3.36 billion (3 billion euros) was completed in October, returning a total of $8.4 billion (7.7 billion euros) to shareholders in 2024. However, Ostermann noted that a discussion around stock buybacks would be warranted.

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Ostermann broke down the numbers and explained the company’s plans to rectify its situation during a webcast Thursday, saying the results represent “a performance that is nowhere near our potential.”

The company plans 20 new product launches this year, including the Dodge Charger Daytona, Jeep Wagoneer S and Ram 1500 REV electric vehicles as well as the Ram 1500 Ramcharger range extender version. That will mean new products in U.S. showrooms, but as one analyst noted, the lineup is EV-heavy, coming at a time when the EV sales picture is complicated.

But along with those EVs comes an expected potential inherent in the new vehicle platforms that Stellantis is about to deliver. Those multienergy platforms are supposed to give the company flexibility to offer not just EVs but gas-powered vehicles and hybrids, which is one of the messages that officials have been touting.

Ostermann made a point, however, that the launches for the vehicles need to be done right. Stressing quality over launch timing would be key for reducing warranty costs for the company and making sure new customers have a better experience, he said.

The company is also continuing to emphasize its efforts to reduce inventories. In the United States, where dealers had been particularly outspoken in their criticism of the company’s direction, the automaker expects to have U.S. dealer inventory at less than 350,000 vehicles this month, down from 431,000 vehicles in June, and on track to hit the previously forecast 330,000 units in November. One analyst suggested that the pace of reduction might need to be more aggressive, however.

Ostermann said there’s more work ahead. Perhaps in some good news for workers, who have endured layoffs in recent months, he said the expectation is for stronger plant utilization in December. As for boosting vehicle sales, Ostermann said, among other things, the company is looking at reducing prices on multiple 2025 model year Jeep products.

Markets appeared to react favorably early Thursday, with the Stellantis share price at $13.58 before 11 a.m., up 34 cents or 2.61%. That’s still far off Stellantis’ high for the year of more than $29 per share in March.

Contact Eric D. Lawrence: elawrence@freepress.com. Become a subscriber. Submit a letter to the editor at freep.com/letters.

This article originally appeared on Detroit Free Press: Stellantis revenue fall wasn’t unexpected, but it was global