Carmakers from Stellantis NV to Ford Motor Co. posted gains in the first quarter, but investors are signaling that the industry is headed for difficult times.
(Bloomberg) — Carmakers from Stellantis NV to Ford Motor Co. posted gains in the first quarter, but investors are signaling that the industry is headed for difficult times.
Stellantis dipped to a three-month low Wednesday after reporting disappointing sales in Europe where a downturn is looming as consumers feel the pinch of inflation and higher interest rates.
The results added to concerns felt at Ford, which said late Tuesday it anticipated more downward pressure on prices, now that supply-chain blockages have eased and more vehicles are being produced. While most luxury-car maker have proven less exposed — Porsche AG plans to boost prices in the US and Europe — manufacturers targeting mid-range buyers are already under pressure from successive price cuts by Tesla Inc.
“Incentives are increasing in the US, and we suspect this could lead to net price normalization as the year progresses,” RBC analyst Tom Narayan wrote in a note commenting on Stellantis’s result. The company’s first-quarter revenue climbed 14% to €47.2 billion ($52 billion), beating expectations.
What Bloomberg Intelligence Says:
Stellantis’ 21% inventory increase, an industry concern, and modest 3% revenue beat at €47.7 billion in 1Q, up 14% year-on-year, failed to impress. Vague 2023 guidance was reiterated of a double-digit operating margin and positive free cash. There were mixed performances in key regions with North America sales above expectations and Europe below.
— Michael Dean, BI automotive analyst
Stellantis 1Q Unimpressive – Inventory Rises, Europe Soft: React
Stellantis’s revenue in Europe gained after months of logistics snags left thousands of vehicles stranded, but the result still missed expectations while luxury brand Maserati’s pricing was “very weak,” Bernstein analyst Daniel Roeska wrote in a note to clients.
The company plans to refrain from entering into a price with Tesla to chase volumes, Chief Executive Officer Carlos Tavares said last week. In a broad market downturn, Stellantis would adjust prices and step up efforts on cost savings, he said.
In the first quarter, “pricing was relatively stable,” Chief Financial Officer Richard Palmer said on a media call. “We do have a good order portfolio in Europe at the moment, so short term pricing should be relatively stable too but clearly that depends on order intake.”
The shares fell as much as 2.4% in Milan trading, the lowest level since Jan. 31.
Aston Martin
Aston Martin Lagonda Global Holdings Plc also reported first-quarter results Wednesday. The British manufacturer said the average selling price per car rose to £213,000 during the first quarter.
–With assistance from Monica Raymunt and Sabah Meddings.
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