Stellantis, the parent of Jeep, Dodge, and Ram reported it had beaten estimates for profits for the first half of the year, as it made note of the fact the automobile sector has grown “more competitive” with regard to pricing.
Over the first half of 2023, revenue was reported as 98.4 billion euros ($108.8 billion) with an adjusted operating income of 14.1 billion euros ($15.6 billion). That beat estimates by Reuters, which had profits coming in at 12.1 billion euros ($13.4 billion). The figures came in 12% and 11%, over the same figures from last year.
Stellantis’s (STLA) adjusted operating income margin dropped 10 basis points to 14.4% as the industrial free cash flow, which backs out certain non-core activities, increased 64% to 8.66 billion euros ($9.58 billion).
Shares of Stellantis rose almost 3% off the report.
CEO Carlos Tavares said of pricing compared to one year prior, when margins were being lifted by higher MSRPs, “If the market is more competitive in terms of pricing, we need to work harder on cost reduction to make sure that we give back to the market the breathing space it needs while protecting our per unit margins.”
Stellantis reiterated its guidance for 2023, of industrial free cash flow and double-digit adjusted operating income margins, noting its 1.5 billion euro ($1.66 billion) buyback program was proceeding as planned.
Tavares said, “Our outstanding performance in the first half of this year supports our long-term sustainability and our ability to achieve the bold ambitions of our Dare Forward 2030 [electrification] plan. We are well-positioned for the remainder of 2023 and beyond.”
Formed in 2021 through a merger of Fiat Chrysler and Peugeot parent PSA Group, Stellantis noted that global shipments were up 9% to 3.2 million vehicles over the first half of the year, primarily due to an easing of supply chain complications and inventory levels normalizing.
Stellantis noted that in the US it was the biggest seller of plug-in hybrid vehicles, primarily due to the Jeep Wrangler and Grand Cherokee 4xe models enjoying healthy success. The company reported that its first fully-electric vehicles would be arriving in the US in the fall, when the Ram ProMaster and Fiat 500 arrive. The company has eight more battery electric models set to arrive after that in 2024, as the Dodge Charger Daytona, Wagoneer S, Jeep Recon, and Ram 1500 Rev pickup among others, arrive at dealer lots.
Stellantis did not address any potential effects of potential work stoppages in its report, as the United Auto Workers union (UAW) and the Big Three automakers GM and Ford hold ongoing labor negotiations. The Big Three currently have a UAW collective bargaining agreement which will expire on September 14th.
