Paris (AFP) – Jeep owner Stellantis said Tuesday it sees sales revenue and profitability rebounding in the second half of the year despite taking a 1.5-billion-euro ($1.7-billion) hit from US tariffs. The 15-brand group that also includes Peugeot, Citroen, and Fiat confirmed the preliminary announcement it made last week of a 2.3-billion-euro net loss in the first half of the year, as sales in North America continued to slump on an annual comparison.
But Stellantis’s new chief executive, Antonio Filosa, said the automaker is beginning to see “gradual improvement” in sales volumes and revenues on a sequential basis “despite intensifying external headwinds”. Like some of its rivals, Stellantis had suspended financial guidance due to the uncertainty surrounding US tariffs and regulatory changes, but it said it now sees an increase in revenues in the second half of the year, as well as an operating profit margin in the low single digits. Under former chief executive Carlos Tavares, the company had long targeted a double-digit margin, but it fell to just 0.7 percent.
Stellantis also put a figure on the impact of the 25 percent US tariffs on auto imports: 1.5 billion euros for 2025 overall, of which 300 million euros was incurred in the first half of the year. Part of the turnaround was taking a 3.3-billion-euro charge, which Stellantis announced last week, which took into account the costs of adapting to new US regulations. Trump’s massive tax and spending legislation, approved earlier this month, removed the penalties for not respecting the so-called CAFE fuel economy targets, meaning automakers can produce and sell more higher polluting cars in the United States.
This is allowing Stellantis to bring back a number of models, including pickup trucks and muscle cars, that had been phased out because of their internal combustion engines to meet fuel efficiency targets and pollution limits. Stellantis said this and a “product wave” of 10 new models this year would support future performance. Company veteran Filosa took over as chief executive in June, half a year after Tavares left, in large part due to haemorrhaging sales in North America.
Filosa has shaken up the company’s management team and moved swiftly to jettison two billion euros of programmes considered as having poor prospects to quickly turn a profit, such as hydrogen fuel cell vehicles. Stellantis shares slumped 3.7 percent in trading on the Paris stock exchange, which was up 0.5 percent overall. Stellantis shares have lost around 37 percent since the start of the year and 70 percent from their peak early last year.
© 2024 AFP
