The automotive sector has been in crisis for some time, the result of structural problems and hasty choices by the EU, which chose to focus on electric, clashing with Chinese competition. There tariff war started by Brussels against some Chinese producers represents the most obvious example and is not good for trade relations. And while they still arrive in Europe negative data from registrations of cars, we are already looking with concern at the quarterly results arriving from the main European manufacturers. What to expect one week after the publication of the third quarter accounts?
Registration data confirm the crisis
New car registrations in Europe they slipped by 6.1% in September, which follows August’s 18.3% decline. The result suffers from the negative sales trend in the three major European markets: France (-11.1%), Italy (-10.7%) and Germany (-7%), while a positive figure was recorded for Spain (+6.3%).
The data for the nine months is not reassuring, since the market shows a modest change (+0.6%) despite just reaching the threshold of 8 million vehicles, the result of the good performance of the market in Spain (+4.7%) and Italy (+2.1%) which counterbalanced the decline in France (-1.8%) and Germany (-1%).
Sales of electric cars I am increased by 9.8% to 139,702 units in September 2024. However, the market volume year to date it was still 5.8% lower compared to the same period last year, with the total market share falling from 14% to 13.1%, led by a substantial decrease recorded in Germany (-28.6%).+
The Stellantis crisis
The negative moment of Stellantis it’s not a mystery. The Turin car manufacturer has already anticipated negative forecastscutting guidance for the current year and announcing a reduction in deliveries by around a fifth. Just a week ago the Group announced that the consolidated deliveries in the quarter closed on September 30, 2024 were estimated at 1.148 million units, 20% less compared to the same period of 2023. A figure that discounts the bad performance in North Americawhere deliveries decreased by approximately 170 thousand units, and in Europe, where deliveries decreased by approximately 100 thousand units compared to the same period last year.
The Stellantis crisis is complete, after the CEO Carlos Tavares in a hearing he explained that, without incentive, the electric car is not competitive and ventilated possible layoffs, causing the unions to rise up. Firm in his positions Minister Urso who, in front of the Assolombarda audience, clarified that the company must do its part and announced the convening of a specific table to get to the heart of the requests that the Italian System unanimously made to Stellantis.
The expectations on the accounts
At this point there is very little optimism about the outcome of the quarterly results, which the Group will publish on October 31st. The forecasts on 3rd quarter results indicate for Stellantis a turnover down to 35.5 billion euroswhich compares with 45.1 billion in the same period of 2023.
Stellantis also cut its 2024 earnings guidance to reflect stronger measures needed to address performance issues in North America and deterioration in global industry dynamics. Now see now a margin adjusted operating between 5.5% and 7%down compared to the previous “double digit”, while the free industrial cash flow is expected in a range between -5 and -10 billion compared to the previous “positive” one.
Competitor numbers
As for the main competitors, the situation is far from rosy, since also Volkswagen is suffering from the crisis in the sector and plan at least 15 thousand layoffs and the closure of some production sites. The forecast for quarter indicate a EPS of 4.44 euros which compares with the previous 7.76 euros and a revenue volume of 75.81 billion against 78.845 billion the year before. Volkswagen also cut its guidance for 2024 and expects a profit margin of around 5.6%, compared to previous estimates of 6.5-7%.
As for Renaultthe French car manufacturer in third quarter dshould report a volume of revenues in the order of 10.71 billion euros, which I know compares with last year’s 10.51 billion.
