Stellantis boss won’t rule out dividend cuts after profits warning

The boss of Stellantis has refused to rule out cuts to dividends next year after issuing a profit warning this week.
The comments from the carmaker behind the Peugeot, Vauxhall and Fiat brands prompted another reverse in its share price. Investors fear payouts will be disrupted by the continuing upheaval in the business.
Carlos Tavares, the chief executive of Stellantis, has said the manufacturer faces operational problems in the US but that these will be addressed before the end of 2026.
• Vauxhall owner Stellantis cuts forecasts amid slump
Speaking on a factory visit in southern France, Tavares said: “Our commitments were made for 2024 and they will be kept. The time for 2025 has not come, we will see what will happen at the end of 2024 for a discussion and a decision for 2025.”
The shares of Stellantis, which is listed on the Milan and Paris stock exchanges, dropped by 4.1 per cent to €11.89. The price has fallen by more than 50 per cent since March, making it the worst-performing automotive stock in Europe.
The group has blamed its problems on a backlog of unsold vehicles in the US, where it operates the Jeep and Dodge brand, and the company has also been slow to adapt to electric vehicles.
The Vauxhall owner recently warned that it would burn through up to €10 billion in cash this year after previously stating its operations would be cashflow positive. The company also cut its estimates for its profit margins, which could come in at nearly half the 10 per cent minimum previously expected.
In a statement on Monday, Stellantis said: “Deterioration in the global industry backdrop reflects a lower 2024 market forecast than at the beginning of the period, while competitive dynamics have intensified due to both rising industry supply as well as increased Chinese competition.”
Analysts at Barclays have downgraded Stellantis’s stock and cut its forecasts for operating profit by between 33 per cent and 45 per cent. They said they were “stunned” by the magnitude of a recent profit warning for the company. The analysts said: “We got wrong-footed on Stellantis, being too slow to acknowledge its US inventory issue and eroding EU and US market shares.”
Bernstein analysts said Tavares had delivered a renewed focus on inventory control and pricing while in charge of Stellantis, and investors had felt “the shop was in safe hands” but that more recent events had suggested they had been “too complacent”.
Tavares, 66, has built Stellantis through a series of acquisitions. The executive merged France’s Peugeot Citroën group with Fiat Chrysler, the Italian-American group, to create a global business on a similar scale to Toyota, of Japan, and the German Volkswagen group.
He went on to acquire Vauxhall — the British brand whose models are produced in factories in mainland Europe — for €1. Under the deal, Stellantis took on large pension liabilities from Vauxhall’s previous owner General Motors.
Tesla has recalled most of its Cybertrucks to fix software causing delays in its rear-view cameras.
The car manufacturer has issued its fifth recall notice in relation to the battery-powered vehicles, which entered production last year.
Tesla has warned that more than 27,000 vehicles may have been affected by reverse camera displays that “may appear blank for up to six to eight seconds” under certain circumstances. US regulators require cars to display images from a rear-view camera within two seconds.
The car company founded by Elon Musk has previously recalled the vehicles owing to faulty wipers, jammed accelerator pedals and other faults.