Stellantis, the multinational automaker formed from the merger of Fiat Chrysler and PSA Group, has revealed its 2024 financial results, which showcase significant declines across several key performance metrics. The company reported net revenues of €156.9 billion for the year, representing a 17% decrease from 2023. Net profit took a staggering hit, plummeting 70% to €5.5 billion, down from €18.6 billion just one year prior, as the company navigated tumultuous market conditions.
These results follow the unexpected resignation of CEO Carlos Tavares, who left the company late last year amid growing concerns about its declining financial performance. According to Stellantis’s Chairman John Elkann, the company remains unwaveringly focused on enhancing its market share and stabilizing its financial condition as they work toward appointing Tavares's successor within the first half of 2025.
It’s been no secret the automotive industry is currently facing considerable challenges, including decreased demand, high production costs, and intensified competition, particularly from Chinese manufacturers. Analysts had projected Stellantis would record profits close to €6.4 billion for 2024, but the reality was starkly different, leading to declining investor confidence, particularly reflected by the 4% drop in shares observed just after the earnings announcement.
For 2025, Stellantis has set ambitious goals, projecting positive revenue growth and anticipating adjustments to its operating profit margins. Elkann emphasized the importance of their generational product portfolio transition, noting the rollout of multi-energy vehicle platforms, which aim to meet diverse consumer demands for electric, hybrid, and traditional combustion options. This transition aligns with Stellantis's strategy to embrace electrification and advanced technologies.
While 2024 was characterized by significant financial setbacks, Stellantis achieved some strategic milestones, such as the launch of products on the new STLA Medium and STLA Large platforms. Noteworthy models include the Peugeot E-3008 and E-5008 as well as plans for upcoming vehicles like Jeep’s Wagoneer and Dodge models, which are expected to hit showrooms shortly.
The company also acknowledged its cash management issues, with negative industrial free cash flows reported at €6 billion last year. This decline points to operational inefficiencies and challenges within its inventory management. Stellantis managed to lower its inventories by 18% year-over-year, exceeding their own targets, yet it still faced substantial difficulties, particularly as U.S. dealerships reported significant overstock issues—a consequence of prior price increases deterring customers.
Further complicate matters is Stellantis's profit-sharing scheme for its employees, who are now set to receive much smaller amounts compared to the previous year. UAW members will see profit-sharing checks of approximately $3,780, which marks nearly 73% less than what they received last year. The company attributed this downturn to the falling operating income margin, which dropped from 15.4% to 4.2% from 2023 to 2024, among other factors.
Even with the hurdles faced throughout 2024, including the pronounced dip in North American sales, Stellantis remains optimistic. The company has restarted several key initiatives aimed at returning to profitability. Elkann stated, "While 2024 was a year of stark contrasts for the Company, we achieved important strategic milestones." He reiterated the company’s commitment to regaining lost ground and fostering positive financial performance by leveraging new technologies and stricter engagement with suppliers and dealerships.
To bolster this transformation, Stellantis plans to use advanced technologies, including artificial intelligence, to streamline its operations and improve customer engagements. This includes partnerships for developing cutting-edge automated driving systems, indicating the firm’s focus on future mobility solutions.
Stellantis also hopes to improve its manufacturing sustainability and tackle regulatory challenges as stringent carbon regulations loom across Europe and the U.S. The company’s operational model is gradually shifting, with Elkann emphasizing the need for efficiency and adaptability to maintain competitiveness amid industry upheavals.
While Stellantis's management continues to face the complex task of stabilizing the company, its proactive approach and aggressive product transition strategy could pave the way for recovery. With the automotive market's recovery anticipated but still uncertain, all eyes remain on Stellantis's next moves as they endeavor to regain strength and put the company back on a path toward sustainable growth and profitability.