(Milan) Stellantis Chief Executive Carlos Tavares pledged Thursday to take steps to address problems in North America and elsewhere after reporting a fall in first-half profits.
US-European automaker Stellantis reported a halving of net profit in the first half, largely due to falling sales and restructuring costs.
The automaker, formed in 2021 from the merger of Fiat-Chrysler and PSA Peugeot, posted a net profit of €5.6 billion (about €8.4 billion) during this period, down 48% from €11 billion in the same period last year. Revenue during the half-year fell 14% to €85 billion.
Mr. Tavares acknowledged that the performance “did not meet our expectations, reflecting both a difficult industry environment as well as our own operational issues.” He said those problems were being resolved and expressed hope that the launch of 20 new vehicles this year would improve profits.
He highlighted North America as a place where there is “significant work to be done,” particularly regarding inventory management and declining market share.
Mr. Tavares also told reporters that the global auto industry is in the midst of a storm he had previously predicted, caught between consumers looking for more affordable vehicles and demands for additional capital spending to develop new electric and gasoline-powered vehicles.
In North America, Tavares said the company had allowed inventory to build up too much and plans to address that in the first half of the year had not worked. List prices are too high and often prompt customers to walk away early in the buying process.
The company offers incentives, such as low-interest financing, that lower its prices. But the sticker price is in some cases higher than competitors’, he acknowledged. “If you don’t show the whole picture right away, the customer walks away because they’re afraid of the sticker price,” Tavares said.
In the United States in June, it took an average of 97 days at dealerships for Stellantis to sell vehicles, the longest in the industry, according to Edmunds.com.
Mr. Tavares said the company had resolved inventory issues in Europe but had work to do in the United States. “I hope it will work much better than in the second quarter and we will be able to resolve the inventory issue,” he said.