Stellantis NV’s first-quarter sales climbed more than expected thanks to strong vehicle prices and higher shipments of models like the Jeep Compass.
(Bloomberg) — Stellantis NV’s first-quarter sales climbed more than expected thanks to strong vehicle prices and higher shipments of models like the Jeep Compass.
Revenue rose 14% to €47.2 billion ($52 billion), ahead of analyst expectations of €45.8 billion, the maker of Ram pickups and Fiat cars said Wednesday. The company reaffirmed full-year guidance for a double-digit adjusted operating income margin and positive industrial free cash flow.
Stellantis, which has been battling logistics snags particularly in Europe, said new vehicle inventory was at 1.3 million cars at the end of March, reflecting a return to more normal levels. Shipments during the quarter rose 7% after availability of semiconductors improved.
“Our main challenge continues to be fulfillment of orders,” Chief Financial Officer Richard Palmer said on a media call. “We have improved the level of capacity we have on key logistics tracks” and made progress with integration of IT systems, which will help market share “into the middle of the year.”
Pricing Challenge
As supply-chain problems ease, carmakers are set to struggle to maintain high prices that have underpinned margins in the aftermath of the pandemic. Successive price cuts from US rival Tesla Inc. — whose Model Y was Europe’s best-selling car during the first quarter — is adding to the pressure. Ford Motor Co. on Tuesday said it anticipated more downside on pricing as industrywide sales volumes “normalize.”
In the first quarter, “pricing was relatively stable,” Palmer said. “We do have a good order portfolio in Europe at the moment, so short term pricing should be relatively stable too but clearly that depends on order intake.”
Europe has emerged as a focal point for a downturn as consumers in the region feel the pinch from a cost-of-living crisis and higher interest rates. Mercedes-Benz AG last week said demand in Europe is falling behind strong US and Chinese markets.
“Demand in holding up well notwithstanding lots of macro volatility” in Europe, the 56-year-old said, who will be stepping down by July after two decades at the company.
The “timing is right” to leave Stellantis, Palmer said. “It’s a reasonable time frame to go and do something different and I think the company is in great shape.”
(Updates with additional comment from CFO in fourth paragraph)
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