Stellantis expects Q3 shipments to fall by a fifth in effort to cut inventories

3:57 am Wednesday, October 16th, 2024

(Reuters) -Stellantis expects a 20% drop in third-quarter consolidated vehicle shipments, the carmaker said on Wednesday amid a declining business performance which led it last month to cut profit and cash-flow forecasts for the full-year.

The group — whose profit warning reflected the need to reduce excess vehicles inventories, especially in North America — said it estimated its global shipments to amount to 1.15 million vehicles in the third quarter, down from 1.43 in the same period of last year.

Stellantis said the 20% shipment decline was steeper than a forecast 15% drop in underlying sales in the period, “due to the temporary impacts of transitions in our product portfolio and dealer inventory reduction initiatives”.

In North America, the group’s profit powerhouse, shipments fell by 171,000 vehicles in the period, or 36%, with more than 100,000 vehicles of that total due to planned production cuts before the launch of new models expected from late 2024.

But Stellantis’ market share in the U.S. rose during third quarter to 8% at end-September, while its inventories fell by 50,000 vehicles from the end of second quarter level, the group said.

In its so-called Enlarged Europe region, shipments fell approximately by 100,000 vehicles, or 17%, in the period, primarily due to delayed launches of some products, including Citroen C3 model, which began shipments in September, Stellantis said.

The carmaker in September cut its 2024 operating profit margin forecast and said it would burn cash for up to 10 billion euros ($10.9 billion) this year, as it pledged to reduce output and offer big discounts to revive its U.S. business.

Stellantis, which will report third-quarter shipment and sales data on Oct. 31, said on Wednesday it was initiating a practice of publishing global quarterly consolidated shipment estimates and providing commentary on related business trends.

The automaker also said third-quarter consolidated deliveries at its luxury brand Maserati, a separate business unit within the group, were expected to fall 60% to 2,100 vehicles.

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(Reporting by Alessandro Parodi and Giulio Piovaccari; editing by Cristina Carlevaro and Jane Merriman)