Stellantis posted better-than-expected earnings in the first half as supply-chain problems eased and higher shipments helped to lift profits.
The automaker on Wednesday reported an adjusted operating income margin of 14.4 percent, beating the 12.2 percent predicted by analysts.
Adjusted earnings before interest and tax (EBIT) were 14.1 billion euros ($15.6 billion).
The first-half 14.4 percent margin was slightly lower than the 14.5 percent a year earlier, when pricing power was supported by a “significant” inflationary environment, CEO Carlos Tavares said.
Adjusted EBIT margin in Europe was 10.7 percent in the first half, a slight increase over 2022 when it was 10.3 percent.
U.S. margin was 17.5 percent, compared with 18.1 percent in 2022. North Africa and the Middle East margin grew to 25.9 percent from 17.4 percent; South America margin was 14.2 percent, versus 13.9 percent in 2022.
U.S., Europe cost cuts
Tavares said Stellantis will have to accelerate a cost cutting to keep profitability strong in a more challenging pricing environment.
He has previously said Stellantis may need to further adapt its industrial footprint in the U.S., its biggest profit pool, and Europe as a consequence of the expensive shift to EVs.
Automakers are under growing pressure as they race to electrify their fleets amid concerns about softening demand across the globe. At the same time, Stellantis and others are finding it harder to maintain the high prices that underpinned profits in recent years as less expensive Chinese EVs become more available.
Stellantis, which is investing 30 billion euros into EVs and software, is under pressure from the French and Italian governments to produce cheaper cars locally to maintain jobs in those markets.
The automaker’s first-half shipments were 1.48 million vehicles, compared with 1.36 million in the first half of 2022, as logistics difficulties eased, although Tavares said France remained a problem.
“Logistics issues are 95 percent solved,” he said.
Stellantis confirmed its full-year outlook for a double-digit margin, positive cash flows and the pace of its share buyback program. The carmaker said it sees demand this year across Europe, the Middle East and Africa to be stronger than previously expected.
Bloomberg and Reuters contributed to this report