American-European consortium of car manufacturers Stelantis reported a large drop in profits in the first half of this year due to reduced sales in Europe and North America and difficulties in production cars.
Net profit was halved in the first half of this year, mainly due to weaker sales and restructuring costs, writes the AP agency.
The carmaker formed in 2021 by the merger of Fiat-Chrysler with PSA Peugeot reported a net profit of 5,6 billion euros in the first six months of this year, down 48 percent from 11 billion euros in the same period of the same year.
Revenues in that period fell by 14 percent to 85 billion euros.
Stellantis is the majority owner of the car factory in Kragujevac, while the minority share is owned by the Republic of Serbia, based on the strategic partnership agreement signed by the Government of Serbia with Italian Fiat in 2008.
The big drop in the half-year results is mainly the result of the reduction in Europe, but also in North America, which brings the most money to the group, and where its share fell, the management announced.
"The company's results in the first half of 2024 are not up to our expectations, and reflect the difficult industrial context and our operational difficulties," CEO Carlos Tavares said in a statement from the group, reports France Press.
He said the problems were being resolved and expressed hope that the launch of 20 new models this year would improve profits.
He indicated that he has a lot of work to do in North America, including managing inventory and the company's declining market share.
Temporary shortages in production
Tavares has previously expressed displeasure with the performance of some US factories, citing accumulated inventories of finished vehicles and a "sub-optimal" marketing strategy.
Stellantis is also facing temporary production shortages due to a transitional period of renewal of some of its main models such as the Ram 1500 pickup and the Peugeot 3008 SUV.
Stellantis management expressed hope that the measures taken by management to improve results in North America and Europe, as well as for Maserati, will provide significant opportunities to increase performance in the second half of 2024 and in 2025.
Management pointed out that 2024 is a "transition year" before the expected strong jump with new car models.
The group has also faced competition that has an aggressive pricing policy and intends to revise its tariffs and promotions especially in the US.
Stelantis designs, manufactures and sells cars of 14 brands: Abarth, Alfa Romeo, Chrysler, Citroen, Dodge, DS, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram and Vauxhall. At the time when the group was formed, it had 300.000 employees, sales in more than 130 countries and production in 30.
Source: New Economy
