Carmaker Stellantis slashes forecasts, faces industry slump and Chinese competition

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Carmaker Stellantis has slashed its earnings forecast, citing investments to turn around its U.S. operations as the wider automobile industry faces a slump and increased Chinese competition

MILAN — Carmaker Stellantis, the world’s fourth largest carmaker, slashed its earnings forecast on Monday, citing investments to turn around its U.S. operations amid a wider industry slump and increased Chinese competition.

Stellantis said it was accelerating efforts to turn around North America, including bringing dealer inventory levels to no more than 300,000 vehicles by the end of the year, instead of the first quarter of 2025 as previously planned.

The action is in the back of a decrease in shipments of 200,000 vehicles in the second half of this year compared with a year earlier, twice as many as the company had forecast. The company will offer higher incentives on 2024 and older models.

In its profit warning, Stellantis said it expected to finish the year with a negative cash flow of 5 billion euros to 10 billion euros, ($5.6 billion to $11.2 billion) instead of positive.

The carmaker, which was created in 2021 from the merger of PSA Peugeot with Fiat Chrysler Automobiles, also dropped its operating profit margin guidance to 5.5% to 7.0%, instead of double digits.

Stellantis shares were down 14.45%, trading on midday Monday in Milan at 12.45 euros.

The struggling maker of Jeep and Ram is looking for a new CEO to succeed Carlos Taveres, who is under fire from U.S. dealers and the United Auto Workers union after a dismal first-half financial performance. The company has portrayed the search as a normal leadership succession plan.

UAW leadership met last week to review contract violations and what they called illegal behavior by