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Capital Calls: Stellantis maiden voyage enters stormier waters

2 minute read

A DS 4 automobile, produced by Stellantis, stands on display during its launch event in Paris, France, February 3, 2021.

MILAN, May 5 (Reuters Breakingviews) - Concise insights on global finance.


CLOUDED SKY. Stellantis’ (STLA.MI), (FCAU.N) maiden ride will get bumpier before it gets smooth. Chip shortages meant the group formed in January from the merger of Peugeot and Fiat Chrysler made 190,000 fewer cars in the first quarter of 2021 read more than it would have done: 11% of planned production. The problem, already flagged by competitors like Ford Motor (F.N), is set to accelerate between April and June, says financial chief Richard Palmer. And it may well continue into 2022.

Despite big challenges in electric cars and China, boss Carlos Tavares is at least starting from relatively solid ground. First-quarter revenue rose 14% to 37 billion euros year-on-year, faster than a 6% rise at Ford in the same period. If Tavares can repeat that in forthcoming quarters, sales would approach 150 billion euros by year-end. That’s 11 billion euros in operating profit, assuming Stellantis hits a 7.5% operating margin target. The only catch is that Refinitiv forecasts suggest analysts have already pencilled this in. (By Lisa Jucca)

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