Stellantis shares plunge as carmaker follows Volkswagen in warning on profits

London CNN —

Shares in Chrysler parent Stellantis plunged almost 14% in Milan Monday after the Italian-American carmaker slashed its forecasts for full-year profitability and cash flow, citing weaker global sales and increased competition from Chinese rivals.

Stellantis (STLA), which also makes Ram Trucks and Jeep, Citroen and Peugeot cars, said in a statement that it expects to be considerably less profitable in 2024 than it previously predicted and that expenditures would exceed cash flow from operations.

The downward revisions were driven by “corrective actions” in North America, such as “increased incentives” on 2024 and older models and disappointing sales in the second half of the year across most regions, the company added.

Stellantis said it would reduce inventory levels in the United States and ship 200,000 fewer vehicles to North American dealers in the second half of 2024 than in the same period last year.

“Deterioration in the global industry backdrop reflects a lower 2024 market forecast than at the beginning of the period, while competitive dynamics have intensified due to both rising industry supply, as well as increased Chinese competition,” the automaker added.

The downbeatupdate comes after Germany’s Volkswagen cut its full-year outlook for sales and deliveries Friday, citing a “challenging market environment.” Volkswagen’s shares were trading 4.5% lower on the day Monday.

Also on Monday, British luxury carmaker Aston Martin Lagonda said operating income this year would come in below last year’s level and that it would produce 1,000 fewer vehicles as a result of disruption in its supply chain and “continued macroeconomic weakness in China.” The company’s shares tumbled nearly 21% in London.

Weste