Paris (awp/afp) – The Stellantis car group recorded a record volume and net profit of 8 billion euros in the first half, continuing to increase its prices in a declining market.
The group with fourteen brands, born from the merger of PSA and Fiat-Chrysler, recorded sales up 17%, up to 88 billion euros, and an operating margin of 14.1%, which had never been reached before by these builders.
Stellantis, however, has seen its sales fall by 7 percent, with 2.9 million vehicles sold worldwide, in a car market that has been significantly slowed by a shortage of electronic chips.
Sales have been particularly affected by the collapse of the European market, where those of the new Peugeot 308, Fiat Scudo and DS4 “are more distinguished by the effects of the shortage of semiconductors”, said Stellantis.
In this context, the results of the first half show an increase in prices, sales of high-end vehicles and positive currency effects, the group said in a press release.
Stellantis recorded a “record” profit in North America, where prices and sales of its Jeep and Chrysler vehicles rose sharply, with a current operating margin of 18.1%. Fiat sales also recovered well in Latin America.
Everywhere, the group has favored the production of more profitable models, including 100% electric cars such as the New Fiat 500 or the Peugeot e-208. These saw their sales jump by 50%, with 136,000 units sold.
Exceeding the expectations of financial analysts, these performances were welcomed by markets on Thursday morning. Stellantis shares were up more than 3% by midday in Paris and Milan.
“It is thanks to the work and investment of workers that they have been able to mobilize”, commented the CFE-CGC trade union in France, asking for the re-opening of negotiations on wage increases and exceptional bonuses to reduce inflation.
The cost is increasing
Inflation has already cost the manufacturer an additional 4 billion euros in the first half, including 3 billion euros in raw materials alone. How far can he raise prices when the economic environment is getting dark?
“We have a very large order book at the moment, three times larger than the pre-Covid-19 order book. Price acceptance is very good,” the group’s CEO Carlos Tavares assured in an interview with the press.
While the supply of electronic chips should “be normalized in 2023”, the group now has its priorities “to absorb” the costs of inflation.
“Whatever the situation of the conflict that will appear in front of us (…) we can reduce our sales by 60 percent and we will still make a profit,” he emphasized.
Stellantis had already recorded a huge profit in its first year of existence in 2021, with 13.4 billion euros in net profit.
The group intends to double its sales (152 billion euros in 2021) by 2030 by taking advantage of market electrification and productivity gains. It promises double-digit operating margins “throughout the decade”.
After a sharp decline in the European car market in the first half of the year, the car giant has revised its sales forecast for the sector sharply lower for 2022.
“Some of our competitors have been very optimistic about the availability of semiconductors in the second half, (…) The situation is improving quarter after quarter, our forecast is cautious”, stressed the chief financial officer, Richard Palmer.
He expects a 12% annual decline in Europe, 8% in North America, stable sales in Latin America, the Middle East and Africa.
However, the group maintains its “double-digit” forecast for 2022, said Mr. Palmer.