Stellantis, the parent company of Chrysler, said Monday that it is speeding up a program to reduce inventory and also issued a huge downgrade to its financial forecasts.
The company that makes Chrysler, Jeep, Fiat, and Peugeot cars said it has a plan to cut its U.S. inventory from the first quarter of 2025 to no more than 330,000 cars by the end of the year.
It now expects North American shipments to drop by more than 200,000 in the second half, down from 100,000 in the first half. This is because it plans to cut costs and capacity while also offering more incentives on cars from 2024 and earlier model years.
Stellantis said it now has a lower market forecast for 2024 because of its own actions and because it saw more competition from rising industry sources and China.
The company based in Amsterdam now expects its adjusted operating margin to be between 5.5% and 7% for the year, down from a previous range of double digits. It also expects its industrial free cash flow to be between -€5 billion ($5.6 billion) and -€10 billion, down from a previous range of “positive.”
The European-traded shares of Stellantis (STLAM -12.85% STLA 2.69%) have dropped 47% since their high point in late March.
The moves were made before the United Automobile Workers might go on strike and after the company said last week it was looking for a new CEO for 2026, when Carlos Tavares’s contract ends. It was said that the company could keep Tavares as one of its choices.
