Stellantis lowers profit outlook for 2024, plans more inventory cuts in US

Stellantis, facing mounting headwinds, particularly in North America in recent months, has lowered its financial guidance for the year and announced even more planned cuts to its U.S. inventory levels.

The owner of the Jeep, Ram, Chrysler, Dodge and Fiat brands, said in a news release Monday that its adjusted operating income margin would not be, as previously forecast, double digit, but rather between 5.5 and 7% for 2024. It said about two-thirds of the reduced margin would be driven by corrective actions in North America.

In addition, the company said industrial free cash flow is expected to drop from "positive" to between negative $5.57 billion (negative 5 billion euros) and negative $11.14 billion (negative 10 billion euros).

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Stellantis touted its work to reduce inventory levels in the United States, "targeting no more than 330,000 units of dealer inventory by year-end 2024, from a prior timing objective of the first quarter of 2025." The automaker said in the release it would cut more than 200,000 in North American vehicle shipments, up from 100,000 in prior guidance, in the second half of this year, increase incentives on 2024 and older model year vehicles and initiate "productivity improvement initiatives that encompass both cost and capacity adjustments."

The company, which recently announced it would terminate supplemental workers and start indefinite layoffs of union-represented workers at many of its U.S. manufacturing facilities, also blamed deterioration in the global auto industry and other factors, including Chinese competition for some of the issues it's facing.

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"The company will continue to leverage and expand its competitive differentiators and believes that the recovery actions being put in place will ensure stronger operational and financial performance in 2025 and beyond," the news release said.

The automaker is expected to release its third-quarter U.S. sales numbers on Tuesday. In recent reporting periods, those sales have been down significantly .

Before 12:30 p.m. on Monday, Stellantis stock was trading at $13.81 per share, down $2.25, or 14%. Stellantis stock closed the day at $14.05, down $2.01 or 12.52%.

This story was updated to include the closing stock price.

Contact Eric D. Lawrence: elawrence@freepress.com . Become a subscriber . Submit a letter to the editor at freep.com/letters .

This article originally appeared on Detroit Free Press: Stellantis lowers profit outlook for 2024, plans more inventory cuts in US