AutoBeta(AutoBeta.net)08/07 Report--

Stellantis Group, the world's fourth-largest carmaker, has almost halved its profits in the first half, promising to take measures, including shutting down unprofitable brands, in response to a sharp drop in profits.

On July 25, local time, Stellantis Group released its operating results for the first half of 2024, with net revenue of 85.017 billion euros, down 14% year on year, net profit of 5.647 billion euros, down 48% year on year, adjusted operating profit of 8.463 billion euros, and adjusted operating profit margin of 10%.

The main reason for the decline in Stellantis Group's financial performance in the first half of the year is the decline in sales volume and poor structure. Stellantis said that the group's inventory reduction measures, many products entering the transition period, and the decline in market share in North America and other major markets were the main factors for the decline in sales, with the profit margin falling most significantly in North America, the main source of profit.

"the company's performance in the first half of 2024 was lower than we expected, reflecting both the challenging industry environment and our own operational problems," Tang Wei, the group's CEO, admitted in a statement. It is understood that the Stellantis Group will take drastic cost-cutting measures and is expected to save 500 million euros in the second half of this year. At the same time, the Stellantis Group will launch 20 new cars this year, and actions taken to improve performance in North America, Europe and Maserati will create opportunities for performance improvement in the second half of 2024 and throughout 2025.

In addition to product updates, Tang Weishi also revealed that it is possible to shut down some unprofitable brands. "if they don't make money, the group will close down and can't afford brands that don't make money," Tang said. "

Stellantis completed its merger in 2021, resulting from the merger of Peugeot Citroen and Fiat Chrysler with a share ratio of 50:50 to become the fourth largest automaker in the world. According to the group's website, Stellantis currently owns 15 car brands, including Abbas, Alfa Romeo, Chrysler, Citroen, Dodge, DS, Fiat, Fiat Commercial vehicles, Jeep, Lancia, Maserati, Opel, Peugeot, RAM, Vauxhall, covering ultra-luxury, luxury, mainstream passenger vehicles and even heavy pickup, SUV and light business vehicles and other market segments. In addition, there are specialized brands of mobile travel, finance, spare parts and services.

Stellantis did not specify which brands it would close, but Lancia, DS and Alfa Romeo are presumed to be relatively dangerous because they are relatively niche and do not account for a large proportion of sales. In addition, the Maserati brand may be sold because some Chinese manufacturers may be interested in the Maserati brand. Other brands are in better financial shape and are less likely to be shut down, such as Fiat, Opel, Peugeot, Citroen and Jeep.

Stellantis Group is the only company whose performance is divided by region. North America contributed more than half of the operating profit of 8.463 billion euros in the first half of 2024 to 4.366 billion euros. About 25% of the profits came from Europe, accounting for 2.06 billion euros. As for the Chinese market, Stellantis Group combined China, India and Asia-Pacific, and the operating profit in the first half of the year was only 57 million euros, almost negligible.

Stellantis's performance in the Chinese market has been dismal, having two joint ventures, Guangzhou Auto Fick with GAC GROUP and DPCA with Dongfeng, which focuses on mass production of Fiat and Jeep models, while Peugeot and Citroen models. In 2022, Guangzhou Auto Fick filed for bankruptcy and its Jeep brand was imported. Stellantis Group's business in China is only DPCA, which is a joint venture with Dongfeng Company. DPCA's market performance is also indescribable, with sales of 37685 DPCA vehicles in the first half of the year, down 14.77% from the same period last year.

Without effective new energy products, Stellantis Group will find it even more difficult in China in the future. In October 2023, the Stellantis Group paid about 1.5 billion euros for a 20 per cent stake in Zero Auto, a new force in Chinese car making, and will form a joint venture with Zero Auto at 51:49. With the exception of Greater China, the joint venture has the exclusive right to export and sell to other global markets, as well as the exclusive right to manufacture zero-running car products locally. Tang Weishi said that now is the best time for Stellantis to support zero-running cars and play a leading role, and Stellantis will also profit from the competitiveness of zero-running cars in China and other markets.

According to the plan, by 2030, Stellantis will have more than 75 all-electric models, with annual sales of 5 million all-electric vehicles worldwide. With the help of zero-running technology, Stellantis can promote the transformation of electrification more quickly and cheaply, which is a clear example of its "budget-saving".

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