Stellantis, the multinational automotive manufacturer, has announced a staggering net loss of 2.3 billion euros (approximately $2.7 billion) for the first half of the year. This financial setback is largely attributed to a persistent decline in sales within the North American market, where vehicle sales saw a dramatic 25 percent drop in volume during the second quarter compared to the same period last year.
In its preliminary and unaudited results, Stellantis reported a 12.6 percent decrease in first-half net revenues, totaling 74.3 billion euros. The overall sales of vehicles fell by 6 percent in the second quarter alone, following a 9 percent decline in the first three months of 2023. The company attributes this downturn to several factors, including the early effects of newly imposed US tariffs, which have significantly impacted its operations in North America.
Stellantis reported that the US tariffs had a notable negative effect, amounting to a 300-million-euro loss. These tariffs, introduced by the Trump administration, impose a 25 percent tax on imported vehicles that do not meet specific domestic manufacturing criteria. In response to these tariffs, Stellantis has temporarily paused production at select plants in Canada and Mexico since April, disrupting its plans to enhance performance in the North American region.
The company acknowledged that the sharp decline in North American sales volumes was influenced by a combination of factors, including reduced manufacturing and shipments of imported vehicles, which were most affected by the tariffs, along with decreased sales to corporate fleets. To address these challenges, Stellantis recorded a 3.3-billion-euro restructuring charge, primarily related to program cancellations and platform impairments. This charge also reflects the impact of recent legislation that eliminated penalties associated with the CAFE fuel economy standards.
Despite these challenges, Stellantis is taking measures to improve its performance and profitability. The company anticipates that new product launches will significantly contribute to recovery in the second half of 2023. However, Stellantis suspended its financial guidance in April due to the uncertainties created by the tariffs.
In a bid to revitalize the company, newly appointed CEO Antonio Filosa, who took over in June, has initiated a management shake-up. Filosa, a company veteran who previously led the North American region, aims to streamline operations and improve overall efficiency. Analysts from finance group ODDO BHF noted that while the 6 percent drop in overall sales volumes aligned with expectations, the 25 percent decline in North American sales was significantly worse than the 12 percent anticipated by experts.
Following the announcement of these dismal results, Stellantis shares fell by 2.1 percent during morning trading on the Paris stock exchange, which itself was down 0.4 percent overall. The company plans to release its audited first-half results on July 29, as scheduled, providing further insights into its financial standing and future strategies.
