Stellantis revenues up 14% to $44.4B in first three months of the year
Stellantis NV on Wednesday said revenue increased 14% to $44.4 billion (27 billion euro) in the first quarter of 2021 as global shipments increased 12% despite a global semiconductor shortage.
The report is the first financial results for the transatlantic automaker since its tie-up between Fiat Chrysler Automobiles NV and French competitor Groupe PSA in January. Unlike its Detroit rivals, Stellantis only will report earnings for the first and second halves of the year. Results for the first half of 2021 are scheduled to be reported in August.
Shipments totaled 1.618 million vehicles in the first quarter. The increase in revenue and shipments year-over-year from its predecessors comes after both companies in 2020 had to shut down plants around the world due to the COVID-19 pandemic.
The shortage of the microchips used in electronics from steering wheels and heated seats to infotainment systems, however, has idled some plants for weeks. The company lost 11% of planned production, or about 190,000 vehicles, in the quarter. It forecasts losses will be worse in the second quarter with some improvement in the second half of the year.
“In our first quarter since the Merger, Stellantis posted strong Q1 2021 revenues," Richard Palmer, Stellantis chief financial offer, said in a statement, "with the diverse brand portfolio driving increased volumes, positive pricing and improved product mix, despite the headwinds from the global semiconductor crisis.”
But with demand strong and U.S. sales increasing 5% year-over-year in the first three months of 2021, inventories are shrinking to the lowest level dealers say they have ever seen and prices are setting records. Global inventory was at 1.234 million vehicles, down 1.8% from December, according to Stellantis.
North American revenue rose 9% year-over-year to $19.112 billion (15.916 billion euro), and shipments fell 4% related to the semiconductor shortage and the discontinuation of the Dodge Journey SUV and Grand Caravan minivan.
Average transaction prices for its vehicles in the United States were up almost 10% to $45,141 as vehicles were taking 25% fewer days to sell in the first quarter, according to auto information website Edmunds.com Inc.
Stellantis sales made it the market leader in South America and in Europe where revenues increased 31% and 15%, respectively. Revenues also increased 20% in the Middle East and Africa and 25% in Asia. For the Maserati luxury brand, revenues were up 71%.
Increasing costs of raw materials such as petrochemicals resulting from the Texas cold snap in February and increased expenses on electrification also represented some financial strains for Stellantis. The company expects almost all of its nameplates to have an electrified option by 2025 and all to have a fully EV option 2030. By the end of the year, 39 nameplates of 110 will be available as a plug-in hybrid or battery-electric vehicle.
Stellantis CEO Carlos Tavares also told French newspaper Le Pointe this week the automaker expects to meet European carbon dioxide emission targets without purchasing environmental credits from Silicon Valley electric vehicle maker Tesla Inc. Fiat Chrysler has spent about $2.4 billion (2 billion euro) to buy European and U.S. credits since 2019.
The combined company also expects to benefit from cost savings related to the merger and from new products entering segments where Jeep does not compete. Jeep in March launched the new three-row Grand Cherokee L SUV at its new Mack Assembly Plant in Detroit. Plans to launch the even larger Wagoneer and Grand Wagoneer SUV this quarter also remain on track even though the shortage of microchips has halted production of the Ram 1500 Classic trucks at Warren Truck Assembly Plant.
The world’s fourth-largest automaker by volume also confirmed its forecast for an adjusted operating income margin between 5.5% and 7.5% for 2021 so long as there are no significant COVID-19 lockdowns.
Stellantis' first-quarter revenue surpassed crosstown rival Ford Motor Co.'s. The Dearborn automaker said it generated $36.2 billion in revenue, up 6%, in the first three months of the year and made profits of $3.3 billion. General Motors Co. will report earnings later Wednesday morning.