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Stellantis, the multinational automaker behind brands including Jeep, Dodge and Chrysler, announced a 48% drop in net profit for the first half of 2024, mainly due to declining sales and production issues in the U.S. market.

The company reported net income of €5.6 billion ($6.07 billion) in the first six months, down significantly from the same period in 2023. Adjusted operating income fell to €8.5 billion, down €5.7 billion, largely attributed to challenges in North America.

Following the announcement, Stellantis shares in Milan fell 8.5%.

CEO Carlos Tavares acknowledged the underperformance, citing a challenging industry landscape and internal operational challenges. He noted that many of the problems stemmed from U.S. operations, which were plagued by poor inventory management, production delays and flawed sales strategies.

Tavares, addressing the media, reiterated the ongoing efforts to address these issues and criticized the extensive cost-cutting measures that had been implemented previously. “The local team needs to focus on profit, sharing and customer satisfaction. Blaming budget cuts is an easy way out, but it is not the solution,” he said.

The company’s U.S. sales fell about 16 percent in the first half of the year, and its market share in North America fell to 8.2 percent, a decline of 1.8 percentage points.

Despite these challenges, Stellantis maintained its 2024 guidance, targeting a double-digit adjusted operating margin, positive industrial free cash flow and at least €7.7 billion in returns to investors through dividends and share buybacks. Tavares expressed confidence in achieving these goals with the help of 20 new model launches, addressing U.S. market issues and implementing additional price cuts to boost sales. He also did not rule out further job cuts.

“This is a highly competitive industry and we have to work hard to achieve our goals,” Tavares said. “We will have to work diligently to get the results we expect.”

Stellantis’ report follows earnings announcements from U.S. automakers General Motors and Ford. GM beat Wall Street expectations and raised its financial targets, while Ford reported a decline in adjusted profit, which disappointed investors.

In the first half of the year, Stellantis recorded net revenues of 85 billion euros, down 14% compared to the previous year.

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