Stellantis, the multinational automaker that owns well-known brands such as Fiat, Jeep, and Citroën, has announced that its profits for this year will be lower than initially forecasted. The company issued the profit warning early this morning, leading to a sharp decline in its stock value, which fell by 13% on both the Milan and Paris exchanges.
The company attributed the lower-than-expected performance to several factors, including increased production costs, stiff competition in the automotive market, and weakening sales, particularly in the United States. Stellantis' warning mirrors similar struggles faced by other European carmakers as the industry contends with a challenging economic environment.
The difficulties in the automotive sector are not limited to Stellantis. Just days prior, Volkswagen issued its second profit warning this year, revising its delivery estimates to 9 million vehicles instead of the previously expected 9.5 million. Mercedes-Benz and BMW have also shared similarly disappointing updates, indicating widespread challenges across the European automotive industry.
Last week, key stakeholders in Germany’s automotive sector, including car manufacturers, suppliers, unions, and government officials, met to discuss the state of the industry. However, no immediate decisions were made regarding potential support measures. The German government highlighted the need for long-term strategies to address the ongoing issues in the sector.
One of the key concerns raised by the industry is growing competition from Chinese electric vehicle manufacturers. German carmakers are advocating for renewed government subsidies to encourage consumers to purchase electric vehicles made in Germany, following the end of a previous subsidy program last year.
As competition intensifies and economic pressures mount, Europe’s automotive industry continues to grapple with uncertainties, while companies like Stellantis work to navigate the challenges ahead.
