Stellantis hit by sales slump in US and Europe

European car manufacturing giant Stellantis has reported a significant downturn in sales for the July to September quarter, citing weakened demand in Europe and production delays as primary factors.

The company's quarterly revenues fell by 27%, compared to the same period in 2023 to €33 billion down from €45.1 billion in the same period last year, reflecting a 36% decline in vehicle shipments in North America and a 17% drop in Europe.

Despite these challenges, the company said it was making progress in managing inventory issues that have significantly impacted its financial targets.

Stellantis reduced its North American inventory by 80,000 units since June, bringing its total inventory to 1.3 million vehicles. This inventory reduction is a key component of the company’s broader strategy to realign operations and ensure a stronger start to 2025.

Doug Ostermann, Stellantis’ new CFO, said "normalisation of our inventory is crucial," underscoring the company’s goal to stabilise its North American operations and return to profitability.

Despite the slower growth in electric vehicle sales and increased competition from Chinese rivals, the company maintained its recently revised full-year guidance for an adjusted operating margin of 5.5 to 7%, down from an earlier projection of 10%.

As part of a drive to streamline operations and ensure profitability Stellantis is currently reviewing its portfolio of 14 car brands to determine which have the strongest future.

Chief executive Carlos Tavares revealed the plan to scrutinise the brands within the next two or three years while at the Paris Motor Show.

But he suggested a successor would see it through as he his contract expires in 2026 and he has not sought a third term in the post.

"We will review each brand’s performance at about two-thirds of the way through the Dare Forward 2030 plan," Tavares stated, referring to Stellantis's long-term strategy. "You could expect decisions in two to three years."

Each of its brands started a 10-year plan in 2021, with the first five years fully financed by the company. After this initial period, each brand will undergo a financial review to assess its viability.

Depending on its financial strength, the 2026 review might entail decisions to sell or even closing any weak brands to focus on higher-performing ones, even though many share platforms  across the brands to ensure manufacturing efficiency, and some share showrooms.