Profits at automobile giants Stellantis NV (NYSE:STLA, EPA:STLA) and Nissan both plummeted, with fierce competition in the US blamed, while both are also trying to sell their older models ahead of new product launches.
Coming days after the disappointing quarterly results from Tesla, shares of Nissan fell 7% in Tokyo and Stellantis screeched 9% lower on the Euronext.
Stellantis plans product blitz
Stellantis, maker of Peugeot, Fiat and Jeep vehicles, reported a 48% fall in profit, which was much worse than expected, as sales fell and it took restructuring costs.
It blamed a combination of "inventory reduction initiatives, temporary product production gaps due to a generational portfolio transition, and lower market share, particularly in North America".
Carlos Tavares said the Netherland-headquartered group is poised for a "product blitz" of 20 new vehicles in the year and so expects product gaps to have peaked, with "corrective actions" being taken to improve performance in North America and Europe.
"We have significant work to do, especially in North America, to maximize our long-term potential," he said.
A similar story at Nissan
At Nissan, operating profits crashed from ¥ 128.6 billion to just ¥ 1.0 billion in its fiscal first quarter, leading the Japanese giant to cut its full-year outlook, even though it expects an improvement in the second half from launches of new models.
While global sales remained even compared to the same period of the previous year at 787,000 units, profit was impacted by increased sales incentives and marketing expenses to meet intense sales competition and optimize inventory, particularly in the US.
Nissan CEO Makoto Uchida said: "Our first quarter results were very challenging. The reasons are clear, and we have implemented measures to recover our performance."
This includes a process to optimise inventory in the US market and improve market expense efficiency, "then, from the second half we aim to maximize sales of new and refreshed models to achieve the revised forecast of sales volume and profit".
“What has been happening on the industry side and competitiveness has been faster and more difficult than we expected this year, and the transition has been bumpier,” said Stellantis’s finance chief Natalie Knight.