To say 2024 was a bad year for Stellantis (STLA) , the world’s 3rd largest automaker, is an understatement.
Last year, the parent company of Chrysler, Dodge, Jeep, and Ram trucks was going through the motions.
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In short, it dealt with poor sales resulting from expensive and dated cars, huge cost cuts that saw Americans lose their jobs, trouble with the UAW and disgruntled dealers, and CEO Carlos Tavares’s sudden exit just before Christmas.
Production operators at the Toledo Assembly Complex make a 2024 Jeep® Gladiator. Stellantis NV, its parent, recently reported that its 2024 net profit fell by 70%.
Stellantis
STLA reports a massive global loss
As a result of the madness of 2024, Stellantis reported on February 26 that its net profit in 2024 fell by 70% to $5.8 billion, the lowest total profit it has reported since its creation in 2021.
Though executives at the North American brand level say that the post-Tavares era provides new opportunities, Stellantis execs told analysts during its earnings call not to expect too much too soon.
They noted that 2025 will be rough, predicting only single-digit profit margins of about 5.5% this year, adding that significant performance improvements won’t come into fruition until well deep into the year.
John Elkann, Stellantis’ board chair, told investors Wednesday that 2024 was “a year we are not proud of,” a sentiment that was quickly echoed by Chief Financial Officer Doug Ostermann, who said it had been “a very rough year.”
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Tough times for Stellantis in North America
In North America, where its business primarily focuses on Chrysler, Dodge, Jeep and Ram, Stellantis lost $1.8 billion in the period from July to December 2024. In comparison, it took in $5.5 billion in adjusted operating income during the same period a year earlier.
Net revenue in the region fell 27% to $66.7 billion, which it blamed on lower volumes after it ceased production of the Dodge Charger and Challenger, the Chrysler 300, and the Jeep Cherokee and Renegade.
The automaker’s North American profit margin also fell from 15.4% in 2023 to 4.2%. Additionally, Stellantis reported an 80% plunge in North American operating income to $2.8 billion, citing “significant impacts from volume/mix, increased sales incentives and higher warranty costs.”
Despite Stellantis’s lowered target for 2025, the company aims to increase its presence on this side of the Atlantic. It plans to invest more heavily in U.S. marketing and adopt a more consistent incentive strategy.
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During the earnings call, Stellantis CFO Doug Ostermann highlighted that the automaker cut production and increased incentives to curb its inflated inventory during the latter half of 2024.
He noted that as a result of the initiative, the number of unsold cars in the U.S. dropped from 430,000 to 304,000 in the latter months of 2024, a good position to start up factories again and have sound footing into 2025.
“I want to recognize that the inventory reduction actions and the progress repositioning our pricing relative to peers pressured results in 2024, particularly in the second half,” Ostermann said. “But this also sets the region up in a much-improved position to start 2025.”
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STLA execs are optimistic
Stellantis is confident its new cars in 2025 can help bring heads into dealers.
Jeep is expected to get a replacement for the mid-sized Jeep Cherokee, the ‘Brotherhood of Muscle’ is expected to welcome the gas-powered Dodge Charger SIXPACK this summer, and Ram Trucks is set to welcome the Ram 1500 Ramcharger EREV later this year.
Additionally, Chairman John Elkann noted that the search for its new CEO is underway, noting that the appointment will be announced later this year.
“We have excellent candidates, both internally and externally,” he said. “And the conversations that we’re having are very encouraging for us to have the best possible CEO for company and stay on track with the announcement of our next CEO by the first half of 2025.”
Stellantis NV is traded under STLA on the New York Stock Exchange.
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