Proactive Investors - European car manufacturing giant Stellantis (LON:0QXR) issued a profit warning as it winds in its production targets for the year amidst what it said was a "deterioration" of the global automobile market.
The Amsterdam-based group, which makes Peugeot, Fiat, Chrysler and Jeep vehicles, cut its guidance for adjusted operating profit margin for 2024 to between 5.5% and 7%, down from the previous guidance of 10%.
Free cash flow will also be negative, in the range of €5 billion to €10 billion, having previously guided to a positive cashflow.
Issued on the same day that luxury carmaker Aston Martin Lagonda also warned on profits due to supply chain issues, Stellantis said it was reducing its 2024 financial guidance due to its decision to "significantly" step up plans to help address performance issues in North America, as well as "deterioration in global industry dynamics".
Previous plans to cut levels of cars in dealerships in the US have now been accelerated, targeting no more than 330,000 vehicles by year-end 2024, pushed up from the prior target of the first quarter of 2025.
North American shipments are now set to decline by more than 200,000 vehicles year-on-year in the second half of 2024, double the earlier guidance.
Prices cuts and other incentives on 2024 models and older vehicles will also be stepped up, while the group will also look to drive productivity improvements by cutting costs and tweaking production capacity levels.
"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," the company added.
Shares fell 14% to €12.51, the lowest in almost two years. On the same day that Aston Martin is also down 24% on its own warning.