Global automotive giant Stellantis NV lowered its annual forecast on Monday (September 30th), citing deteriorating industry trends, rising restructuring costs in the United States, and intensifying competition from electric vehicles from China.
On the same day, British luxury sports car brand Aston Martin also issued a full-year profit warning, citing weak sales in China.
Prior to this, Stellantis’ three major competitors, BMW, Mercedes, and Volkswagen, had all lowered their annual outlook for the second time within three months.
Stellantis warned that sales in the second half of the year would be below expectations in “most regions”, and projected the adjusted operating income (AOI) profit margin for the full year 2024 to be between 5.5% and 7.0%, lower than the previous “double-digit” expectation.
The automaker stated, “The worsening global industry backdrop reflects market expectations for 2024 lower than initial predictions, and intensified competition dynamics due to increased industry supply and competition from China have become more intense.”
The company also revised its expected free cash flow to a range of negative 5 billion euros (5.8 billion U.S. dollars) to negative 10 billion euros, compared to the previous expectation of being “positive”, due to the anticipated lower adjusted operating income profit margin and temporarily higher operating capital in the second half of this year.
Stellantis is a joint French and Italian automotive manufacturer, with brands including Chrysler, Dodge, Jeep, Fiat, Citroen, and Peugeot.
Aston Martin also issued a profit warning on Monday, stating that the company’s annual core profit would be lower than expected, and reduced its production volume forecast due to supply chain disruptions and weak market conditions in China, leading to an 8% drop in its stock price in early trading.
The British luxury car manufacturer, like its European counterparts, expressed the challenging situation in China, the world’s largest automotive market.
Aston Martin stated that it no longer expects positive free cash flow in the first half of the year and lowered its wholesale volume target for 2024 by around 1,000 vehicles to address this issue.
The company said in a statement, “Due to multiple supply chain disruptions, the company is facing increasing delays in the delivery of components.” This has resulted in extended times required for car manufacturing to complete and delays in deliveries.
Aston Martin’s iconic models have gained fame through the James Bond film series. The company has ceased production of older models, hoping that new models will drive revenue and profit growth in the second half of this year.
(This article is based on a report from Reuters)