PARIS: Stellantis NV’s earnings plunged 48% in the first half of the year, forcing the company to bring back old models as its newer lineup failed to impress customers in the US.
The company said it would revive its popular Dodge Charger and is mulling price cuts as it prepares to introduce as many as 20 new vehicles this year.
The results, reported Thursday, fell well short of analysts’ expectations and add to the pressure for chief executive officer Carlos Tavares, the highest paid CEO among traditional carmakers, to reverse a decline in market share in several countries.
He is facing challenges ranging from executive departures and quality issues in the US to recalls in Europe over problems with Takata airbags.
Margins declined most significantly in North America, Stellantis’ key region for profits, after shipments declined 18% amid an unfavourable model lineup and pressure on prices, the company said.
North America "is the market that needs the most work and where we are most concentrated,” chief financial officer Natalie Knight said on a call with reporters.
Net income fell to €5.6 billion (RM28.3bil) in the first six months of the year, the manufacturer said, missing the €7 billion (RM35.4bil) average estimate in a Bloomberg survey of analysts.
Stellantis will be re-introducing some models it had pulled from the US, including the Dodge Charger, to win some clients back, Knight said, adding that the carmaker is likely to introduce "gradual price adjustments,” especially as they introduce new products.
The company also plans to further lower labour costs and expects 25% reduction in logistics expenses in the second part of the year, the CFO said.
Tavares, has already extensively cut costs, with €500 million (RM2.5bil) more in savings to slated for the second half of the year.
Some analysts have started flagging the limits of his strategy on costs, and he’s also faced pushback from shareholders and advisory firms over his US$39 million (RM182mil) pay package for last year, a 60% increase from 2022 levels.
The carmaker is taking "corrective actions” to address the problems, Tavares said. Stellantis reiterated it’s launching 20 new vehicles this year to help boost momentum.
