PARIS — Shares in Jeep-maker Stellantis and Britain's Aston Martin tumbled on Monday after both companies joined European rivals in cutting their profit forecasts. European auto giant Stellantis, whose other top brands include Peugeot, Ram and Fiat, cited efforts to improve its US business as well as competition from Chinese automakers. The company, which also makes Maserati, Dodge and Chrysler cars, said it now expects an adjusted operating income margin ranging between 5.
5 and 7.0 per cent. It had previously expected double-digit growth.
Stellantis shares sank by almost 13 per cent to 12.74 euros ($14.26) in late morning deals on the Paris stock exchange.
"While this is a highly anticipated profit warning ...
, the magnitude surprises," UBS bank analysts said in a note. In a statement, the company said efforts to improve its business in North America accounted for about two thirds of the revision of its financial guidance for the year. Stellantis said it brought forward to the end of this year plans to reduce its dealer inventory levels to 330,000 units in the United States.
Stellantis offered promotional deals as US dealerships have struggled to reduce their inventories. The company, which previously expected a positive cash flow, also said it now forecasts negative cash flow ranging between five billion and 10 billion euros. "Deterioration in the global industry backdrop reflects a lower 2024 market forecast than at the beginning of the period, while competitive dynamics.
