Automobiles: European Stock Markets in Negative Territory, Dragged into Abyss by Stellantis

As if disappointing registrations data in August wasn’t enough, the tempest in the auto sector dragged European stock markets into the eye of the storm on Monday, September 30, which closed in the negative due to a profit warning from automotive group Stellantis.

Stellantis reported a downward revision (profit warning) to its economic and financial results in 2024 due to severe “performance challenges in North America and deteriorating sector dynamics globally.” The announcement caused the value of Stellantis shares to plummet in the stock market, causing the stock to fall 14.5% by the closing bell.

Specifically, Stellantis reported “that it changed estimates on two key metrics: operating profit margins fell to 5.5%-7% from the previous 10%.” In addition, industrial cash flow, i.e. the liquidity generated by core activities, was constantly revised downwards, moving from positive to negative, to say the least, indicating losses of between 5 and 10 billion euros.

According to the Italian press, “Stellantis has been in crisis for some time,” and in Italy the car group has been heavily criticized by both the government and trade unions for “constantly reducing the production in Italian factories, with the consequent impact on workers and companies in the spin-off sector.” Stellantis, like many other car manufacturers, has been hit by a serious crisis that has affected the entire European automotive sector and has serious repercussions for almost all manufacturers, including Germany’s top three companies Volkswagen, Mercedes Benz, and BMW.