Auto giant Stellantis on Thursday reported a 27% decline in third-quarter net revenues, but said it was making headway in addressing operational issues such as U.S. inventories.
The Netherlands-based company, which owns household names including Jeep, Dodge, Fiat, Chrysler and Peugeot, said that net revenues for the July-September period came in at 33 billion euros ($35.8 billion). Analysts had expected third-quarter net revenues to come in at 36.6 billion euros, according to an LSEG-compiled consensus.
The firm attributed the drop primarily to “lower shipments and unfavorable mix as well as pricing and foreign exchange impacts.”
It said it was on tack to deliver approximately 20 new models this year, adding that it was making good progress on slashing bloated inventories, especially in the U.S.
Its total stocks fell by 129,000 units between January and September to 1.3 million. The automaker noted that the U.S. dealer inventory was cut by 80,000 units between June 30 and Wednesday. Stellantis said it is set to reach its target of slimming down the U.S. stocks by 100,000 units by the end of November.
Doug Ostermann, chief financial officer at Stellantis, conceded that the quarterly performance was “below our potential,” but said that U.S. inventories had been “reduced meaningfully” and were set to hit the company’s targets.
“In Europe, stringent quality requirements delayed the start of certain high-volume products, but with progress resolving challenges we will soon benefit from the significantly expanded reach our generational new product wave brings to 2025 and beyond,” he said in a statement Thursday.
The trans-Atlantic automaker issued a profit warning in late September, trimming its annual guidance on the back of deteriorating “global industry dynamics” and a push to expand remediation actions on North American performance issues.
Milan-listed shares of Stellantis, which have shed more than 42% year-to-date, ticked up 1% on Thursday morning. Jefferies analysts flagged that the automaker’s net revenue for Europe were a 14% beat compared to expectations.
American car brands Jeep, Ram, Dodge and Chrysler have been struggling under their European owner. Out of all brands in the U.S., Stellantis has some of the highest inventories of vehicles on dealer lots, according to Cox Automotive â suggesting less consumer demand for the products.
Stellantis is currently suing the United Auto Workers over strike threats, escalating a long battle between the automaker and the American union, according to CNBC reporting.
Like many in the auto industry, Stellantis has been contending with a perfect storm of challenges on the road to full electrification, including faltering global demand for electric vehicles (EVs) and competition from China.
The pressure on European automakers is poised to ratchet up even further next year, when emissions-reduction targets come into force. Against this backdrop, car manufacturers have recently launched an array of low-cost EV models, acutely aware of the need to boost sales.
âCNBC’s Robert Ferris contributed to this article.
