Stellantis is Writing Off 2024

CFO Doug Ostermann says "significant headwinds" will likely keep things down through 2024.

By: Christopher Smith

Oct 31, 2024 at 12:30pm ET

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Stellantis reports a 27-percent drop in revenues and a 20-percent decline in shipments for Q3 2024.
Company CFO Doug Ostermann said Stellantis is "nowhere near" its potential.
High US inventories are starting to come down, but are expected to remain high through the end of the year.

It's no secret that Stellantis is struggling. The company just announced a bevy of third-quarter financial statistics, though two numbers stand out in the crowd. Revenue is down 27 percent, and vehicle shipments are off 20 percent. Specifically, that's 279,000 fewer cars versus last year.

These are global stats, but a closer look at North America shows a bleaker picture. Shipments there are down 36 percent thanks to fat dealer inventories amid slow sales. That accounts for a majority of the global decline at 170,000 fewer cars, though some progress is being made. Stellantis reports US dealer inventories are down by over 80,000 units compared to June, but Chief Financial Officer Doug Ostermann told reporters the situation in the US will likely stay bleak through 2024 before rebounding next year.

“We at Stellantis know the pullback in top-line results in Q3 2024, as well as our guidance for the full year, represent a performance level that is nowhere near our potential,” he said.

Photo by: Stellantis

Stellantis CEO Carlos Tavares painted a dire picture for the company earlier this year, calling out North American operations specifically for having a poor marketing plan to drive sales. Ostermann—who was promoted to CFO just a couple of weeks ago—emphasized changes to the "sales funnel" that includes better sales leads for dealers, incentives for older vehicles still on lots, and lower starting prices for 2025 models. To his credit, the Jeep Grand Cherokee did receive a notable price cut. However, he also acknowledged that high prices and affordability for new vehicles were challenges for Stellantis and the entire automotive industry.

"As the industry continues to introduce more and more technology on many vehicles, the OEMs have been walking away from absolute affordability," he said. "One of my big to-do list items now as the new CFO is to really look at cost, look at affordability, and work on that over time."

Not mentioned during the conference call were layoffs and temporary production halts occurring at Stellantis factories. FCA's Detroit Assembly Complex Jefferson was shut down this week, which builds the Dodge Durango and Jeep Grand Cherokee. Most of the plant's 5,000 workers were on a temporary layoff, though 200 employees received permanent layoff notices in September.

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Despite the sour news, Ostermann believes things will turn around in 2025.

“While Q3 2024 performance is below our potential, I’m pleased with our progress addressing operational issues, in particular U.S. inventories, which have been reduced meaningfully and are on track for year-end targets, as well as stabilization of U.S. market share. In Europe, stringent quality requirements delayed the start of certain high-volume products, but with progress resolving challenges we will soon benefit from the significantly expanded reach our generational new product wave brings to 2025 and beyond."