Paris (AFP) – Jeep owner Stellantis said on Monday it suffered a massive loss in the first half of the year, when it felt the first impact of new US tariffs and took a massive charge following a change in US laws. The 2.3-billion-euro ($2.7-billion) net loss in the first half of the year came as sales in North America continued to slump, down 25 percent by volume in the second quarter year-on-year. The carmaker, whose stable of brands also includes Peugeot, Citroen and Fiat, said first-half net revenues dropped 12.6 percent to 74.3 billion euros, according to the preliminary and unaudited results. Sales of vehicles fell by six percent in the second quarter year-on-year, after having dropped nine percent in the first three months of 2025.
Stellantis said “the early effects of US tariffs” had a 300-million-euro negative impact and disrupted its plans to boost its flagging performance in North America. Automakers have struggled to respond to US President Donald Trump’s new US tariff of 25 percent on imported cars that are not largely made within North America. The company, which also owns the Chrysler, Dodge and Ram Truck brands, paused production at some plants in Canada and Mexico in April as the tariffs went into force. Stellantis said the sharp drop in North American sales volume was “due to factors including the reduced manufacture and shipments of imported vehicles, most impacted by tariffs,” as well as lower sales for corporate fleets.
– Restructuring charge –
Stellantis also took a 3.3-billion-euro charge, which it said was “primarily related to programme cancellation costs and platform impairments, net impact of the recent legislation eliminating the CAFE penalty rate and restructuring.” 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. The company said it was in the early stage of taking action to improve performance and profitability, with new products expected to deliver a larger impact in the second half of 2025.
Shares in Stellantis fell more than two percent in morning trading on Monday before surging back more than two percent higher. The company’s chief financial officer Doug Ostermann said in a conference call that about two billion euros of the charge was linked to cutting “product programmes where we really couldn’t see sufficient returns.” These included the restructuring cost of European layoffs, the scrapping of a 700-million-euro programme to develop hydrogen fuel cells and vehicle recalls due to faulty Takata airbags in Europe. Stellantis suspended its financial guidance in April due to the heightened uncertainty generated by US tariffs. “There’s a lot of uncertainty in the environment today — both economic uncertainty and a lot of regulatory uncertainty,” Ostermann said.
– New leadership –
Analysts at finance group ODDO BHF said a drop in sales was widely expected and noted that new chief executives often spring-clean by passing new provisions or restructuring charges. Company veteran Antonio Filosa took over as chief executive in June and immediately launched a management shake-up. Filosa headed up the North American region that accounts for most company profits and whose struggles last year precipitated the sacking of Carlos Tavares, and has retained responsibility for the region. While the overall six-percent drop in sales volumes was in line with analyst expectations, according to ODDO BHF, the 25-percent drop was double the 12 percent foreseen by analysts. The firm said it would release audited first half results on July 29 as scheduled.
© 2024 AFP
