Stellantis first-quarter revenues, shipments fall amid transition to new vehicles

Stellantis NV on Tuesday said its first-quarter revenue fell 12% to $44.7 billion (41.7 billion euro) compared to last year as the company transitions to a number of next-generation vehicles that will be built on new platforms.

Vehicle shipments worldwide were down 10%, to 1.3 million, compared to the same three-month period a year ago.

For North America, a major financial engine for Stellantis, revenue declined 15% to $20.7 billion (19.3 billion euro), while shipments were down 20% to 407,000 total vehicles as the company rolls out new models this year such as a refreshed Ram 1500 and all-new electric Dodge Charger.

In Europe, the company's other big financial engine, revenue decreased 13%. In South America, it was down 2%, and in Asia, it was down 46%. The Middle East and Africa were bright spots, with combined revenue up 24%, in part thanks to higher pricing.

"We are in this transition period where we are getting ready to show you the true color of Stellantis, as we bring new products to market, where we have multiple energy opportunities that allow us to benefit from a cost side, from addressing the consumers in the best way, and also showcasing our agility," Stellantis Chief Financial Officer Natalie Knight said on an investor call.

"I think while there are things we would love to have seen different, and better, in the first quarter, we are very proud of where we're moving when it comes to market share on inventory. We think we're doing things in the right way."

The company plans to launch 25 new models this year, including 18 electrified vehicles, which Knight said would translate into better growth and profitability metrics in the latter half of 2024. It is launching those new vehicles on a small handful of underlying platforms, which the company says will result in lower production costs, as well as greater flexibility to shift between gas, hybrid, and full electric-powered versions as consumer demands change.

The transition to those new vehicles has meant various vehicle stocking and manufacturing tweaks were made in recent months, which Knight said affected the quarterly results. For example, she said, the Brampton Assembly Plant in Ontario discontinued the Chrysler 300, and the Dodge Charger and Challenger, ahead of a new Charger coming out later this year, which resulted in 50,000 fewer vehicles being produced there. And a decrease of 20,000 Ram 1500 trucks produced at the Sterling Heights Assembly Plant also contributed, she said, as the company moved over to producing a new version of the pickup there.

"Our Q1 focus has been on selling down prior-generation products in preparation for the launches of next-generation products based on our new STLA platforms, which is expected to ramp up significantly in the second half of the year," Knight said.

With this older product mix, the company's U.S. sales struggled in the first quarter, down 10% year-over-year — a contrast with a majority of other automakers, which posted gains. Its Ram and Dodge brands faced especially steep sales drop-offs in those results, which the company posted earlier this month.

However, worldwide first-quarter vehicle sales stood at 1.5 million, about the same as the first quarter last year. The overall numbers were especially helped by the Middle East and Africa, which combined saw 23% sales growth compared to last year. Global inventory stood at almost 1.4 million vehicles at the end of March, which the automaker said reflected an improvement since the end of last year.

Knight said results should gradually improve the rest of the year.

"We expect second-quarter revenues to improve sequentially, with smaller year-over-year declines, and for the second half of the year, to be well-positioned to deliver positive year-over-year top line growth," she said. "With respect to profitability, we remain fully committed to our double-digit (adjusted operating income) guidance for 2024."

Unlike its Detroit rivals, Stellantis, headquartered in Amsterdam, only reports earnings for the first and second halves of each year. Full results for the first half of 2024 are scheduled for July 25. Through all of 2023, the company posted record net profits worldwide of $20 billion.

In the United States, the company has continued to trim both its white collar and manufacturing employee headcounts in recent months, and has said more layoffs at its plants are coming as it conducts ongoing "operational reviews." The company has said it's working to maintain a competitive advantage amid the electric vehicle transition and as it looks to slash its carbon footprint in half by 2030.

Knight confirmed this type of cost-cutting, including job reductions, would continue.

"We're going to continue to optimize our labor costs," she said. "You know, this is something that has been important both on the white collar and to a lesser extent on the blue collar side," adding that "there will be more opportunities."