Stellantis, the world’s fourth-largest automaker, has dramatically revised its 2024 profit outlook due to significant challenges in the U.S. market and global economic pressures. The company now expects its adjusted operating income (AOI) margin to fall between 5.5% and 7.0%, a sharp drop from its earlier double-digit projections.

The weakened outlook is largely attributed to performance issues in North America, where Stellantis has decided to slash vehicle shipments by over 200,000 units in the second half of 2024. To further combat sluggish demand, the automaker is offering steeper discounts on older models and implementing cost-saving measures. These efforts aim to clear dealer inventories, which Stellantis hopes to normalize by reducing stock to 330,000 units by the end of the year.

Adding to its woes, Stellantis faces growing competition from Chinese car manufacturers, contributing to a more difficult global environment for European automakers. In response, Stellantis has intensified efforts to improve productivity while also preparing for tougher market conditions ahead. Its industrial free cash flow is now expected to range from -€5 billion to -€10 billion for the year.