Flaunt Weeekly
On today’s earnings call, Stellantis executive chairman John Elkann was blunt: “2024 is a year we are not proud of.” So says the man who is acting as interim CEO as a search for a new leader continues after the resignation of Carlos Tavares in December in response to a disastrous year for the automaker.
Stellantis was formed in 2021 with the merger of Fiat Chrysler Automobiles and PSA Group. Elkann credited Tavares for creating the automaker, setting its initial path, and creating synergies. Now it is time for a new CEO and profitable growth.
Once the envy of its peers with double-digit profit margins and scale wielded across its 14 brands, Stellantis saw the bottom fall out in 2024. The operating profit margin fell to 5.5 percent in 2024 and is forecast to remain in mid-single digits in 2025 as the company tries to regain its footing. The automaker lost five points of market share in North America and in Europe. Adjusted operating income fell to $9 billion. Revenue was down 17 percent to $165 billion with 12 percent fewer shipments.
The $5.8 billion net profit was a 70 percent drop. North American profit margins fell from 15.4 percent to 4.2 percent. The poor performance means UAW members in the U.S. will get $3,780 in profit sharing, substantially less than their GM and Ford counterparts who earned $14,500 and $10,208 respectively.
So, What Now?
This is the year Stellantis gets back on track with a focus on profitable growth, Elkann told investors on a call to report fourth-quarter and full-year 2024 financial results. The 2024 results reflect lost production, sales, revenue, and share from bloated inventories, gaps in the lineup, inflated pricing, and misreading of regional differences and customers. To address the problems, the company reduced production, restructured the organization, and adjusted pricing and incentives.
Going forward, Stellantis is counting on the strength of its products, inventory discipline, more spending on marketing, and empowering regions to better meet customers demands and respond to regulations, Elkann said.
On the product side, North America has the new Dodge ChargerRam 1500 Ramcharger extended-range EV pickupnew heavy-duty Ram pickupsthe introduction of the 2025 Jeep Wagoneer S midsize electric SUVand a hybrid successor to the Jeep Cherokeefilling a large gap in the product line.
To be more transparent, Elkann said Stellantis will join its peers in reporting financial results quarterly, instead of twice a year as it has been doing.
New CEO This Year
The search for a new CEO is on track with excellent candidates both internally and externally, Elkann says. The committee is looking for someone with leadership abilities and cultural dexterity, who understands capital, technology, and how to work in a unified way with all stakeholders. He said he is confident Stellantis will be able to appoint a new CEO in the first half of this year. and Elkann said the current measures to fix the company provide “an incredible launchpad for the next CEO to reach the full potential of Stellantis.”
Elkann said Stellantis was formed in 2021 to compete in the global march to electrification and the need for scale to succeed. Those reasons are equally important today with the need to be competitive in software and the pursuit of autonomous driving capability amid tougher regional regulatory requirements.
