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The recently launched Alfa Romeo Junior is one of 20 new models expected from Stellantis in 2024. Picture: SUPPLIED
The recently launched Alfa Romeo Junior is one of 20 new models expected from Stellantis in 2024. Picture: SUPPLIED

Reduced shipments and lower pricing power slashed Stellantis revenue by 27% in the third quarter, the carmaker said on Thursday as it seeks to fix bloated inventories and poor commercial performance that led to a major profit warning last month.

The result was however slightly better than expected, with Stellantis shares up 1.2% on Thursday morning, among the best performers on the Milan bourse’s blue chips.

“Inventory reduction in the US is running at a faster rate than expected,” new finance chief Doug Ostermann said, adding that he expected to reduce inventories at US dealers by 100,000 vehicles ahead of an end-November target.

Stellantis said total inventory stood at 1.33-million units as of September 30, down 129,000 year-on-year. In the US, total inventory at dealers fell by over 80,000 from June 30 to October 30.

Ostermann, who previously headed Stellantis’ operations in China, replaced Natalie Knight this month as part of a top management reshuffle aimed at correcting strategic mistakes, especially in North America.

Stellantis’ specific problems are combining with broader struggles for Western carmakers, including soft global demand, especially for electric vehicles (EVs), technological transition challenges, and increased competition from Chinese peers.

Europe’s biggest carmaker Volkswagen is assessing plans to shut at least three factories in Germany and lay off tens of thousands of staff, in a more radical than expected overhaul.

Stellantis’ shares have lost about 40% of their value this year.

Analysts at Citi said on Thursday that they remained cautious on them, seeing “little upside despite the sharp underperformance this year”, amid expected further pricing power deterioration globally, Chinese competition and 2025 EU rules on emissions and EV market penetration.

Stellantis posted third-quarter revenues of 33bn (R635bn), beating analyst expectations of €31.1 billion euros, according to a Reuters poll run after October 16, when Stellantis, for the first time, provided preliminary forecasts on its quarterly unit sales and shipments.

Shipments fell 21% to 1.17 million vehicles. Gaps in the product line-up were the main driver of the decline, Ostermann said, though he added those gaps should start to close.

The company said it remained on track to launch about 20 new models across 2024.

Among them, the new Peugeot 3008 mid-sized SUV, Citroen’s hybrid C3 and fully electric e-C3 and Alfa Romeo’s sporty compact SUV Junior had already reached the streets or were available to order, the group said.

Reuters

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