Shares in automakers Stellantis NV and Britain’s Aston Martin Lagonda Global Holdings PLC tumbled yesterday after both companies joined European rivals in cutting their profit forecasts.
European auto giant Stellantis, whose other top brands include Peugeot, Ram and Fiat, cited efforts to improve its US business as well as competition from Chinese vehicle manufacturers.
The company, which also makes Maserati, Dodge and Chrysler cars, said it expects an adjusted operating income margin ranging between 5.5 and 7.0 percent.
Photo: Reuters
It had previously expected a double-digit growth.
Stellantis shares sank by almost 13 percent to 12.74 euros (US$14.25) in late morning deals on the Paris stock exchange.
The company in a statement said efforts to improve its business in North America accounted for about two-thirds of the revision of its financial guidance for the year.
Stellantis said it brought forward to the end of this year plans to reduce its dealer inventory levels to 330,000 units in the US.
The company, which previously expected a positive cash flow, also said it forecasts negative cash flow ranging between 5 billion and 10 billion euros.
“Deterioration in the global industry backdrop reflects a lower 2024 market forecast than at the beginning of the period, while competitive dynamics have intensified due to both rising industry supply, as well as increased Chinese competition,” Stellantis said.
European car companies have struggled to keep up with competition from Chinese electric vehicles (EVs).
German auto giants Volkswagen AG, Mercedes-Benz AG and BMW AG have also cut their guidance over the past few weeks, all partly due to weakness in China.
Aston Martin also cited the Chinese market as it trimmed its financial guidance for this year, saying its core profit is now expected to be “slightly below” the previous year’s.
The company’s shares were down more than 20 percent to ￡1.27 (US$1.70) in late morning deals in London.
Aston Martin, famous for being James Bond’s favorite car, in a statement said that it would cut production by 1,000 units this year “to address disruption in its supply chain and continued macroeconomic weakness in China.”
Delays in receiving components have hit the car maker’s output and postponed deliveries.
However, the company said its “fully reinvigorated portfolio of ultra-luxury high performance models” would support future growth.
Meanwhile, Chinese manufacturers sold the fewest EVs in 18 months to customers across Europe, with registrations falling by 48 percent in August from a year earlier — the second straight month of declining share for Chinese brands, figures provided by researcher Dataforce showed.
Automakers are still weighing the potential impact of the EU tariffs, which affect all EVs imported from China, including those from non-Chinese companies BMW, Stellantis and Tesla Inc. The added duties are set to be finalized this month, pending a member state vote, with negotiations between Beijing and Brussels taking place amid furious lobbying.
Additional reporting by Bloomberg
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