Stellantis tops H1 forecasts, looks to cost cuts to keep margins strong

MILAN (Reuters) -Carmaker Stellantis said on Wednesday its operating profit rose 11% in the first half of this year, with revenue increasing on higher vehicle shipments.

But the world’s third largest carmaker by sales will have to accelerate a cost cutting to keep profitability strong in a more challenging pricing environment, CEO Carlos Tavares said.

Stellantis’ January-June adjusted earnings before interest and tax (EBIT) amounted to 14.1 billion euros ($15.6 billion), topping the 12.1 billion expected by analysts in a Reuters poll.

Its margin on adjusted EBIT slipped to 14.4% from 14.5% a year earlier, when pricing power was supported by a “significant” inflationary environment, Tavares said in a media briefing.

“If the market is more competitive in terms of pricing, we need to work harder on cost reduction to make sure that we give back to the market the breathing space it needs while protecting our per unit margins,” he said.

Stellantis’ first-half EBIT margin fell 60 basis points to 17.5% in North America, the group’s most profitable region.

The carmaker confirmed its target for a double-digit margin for the full year.

($1 = 0.9038 euros)