Stellantis NV’s shares plummeted as much as 10% after the carmaker said it was bringing back old models and mulling price cuts to cope with a massive drop in sales during the first six months of the year.
Net income fell 48% to €5.6 billion ($6.1 billion) in the first half, the manufacturer said, missing the €7 billion average estimate in a Bloomberg survey of analysts.
The results, reported Thursday, add to pressure on Chief Executive Officer Carlos Tavares, the highest paid CEO among traditional carmakers, to reverse a decline in market share in several countries. He is facing challenges ranging from executive departures and quality issues in the US to recalls in Europe over problems with Takata airbags.
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Margins declined most significantly in North America, Stellantis’ key region for profits, after shipments declined 18% amid an unfavorable model lineup and pressure on prices, the company said.
North America “is the market that needs the most work and where we are most concentrated,” Chief Financial Officer Natalie Knight said on a call with reporters.
Stellantis will be reintroducing some models it had pulled from the US, including the Dodge Charger, to win some clients back, Knight said, adding that the carmaker is likely to introduce “gradual price adjustments,” especially as they introduce new products.
Knight suggested the company may reconsider what would be “the best home” for Maserati, even though for now the group remains focused on driving improvements at the brand, whose shipments plummeted by more than half to 6,500 units in the first six months of the year.
The company also plans to further lower labor costs and expects 25% reduction in logistics expenses in the second part of the year, the CFO said.
French peer Renault SA also fell 9.9%, the biggest intra-day decline since March 2022.
Tavares has already extensively cut costs, with €500 million more in savings slated for the second half of the year. Some analysts have started flagging the limits of his strategy on costs, and he’s also faced pushback from shareholders and advisory firms over his $39 million pay package for last year, a 60% increase from 2022 levels.
The carmaker is taking “corrective actions” to address the problems, Tavares said. Stellantis reiterated it’s launching 20 new vehicles this year to help boost momentum.