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Stellantis NV warned that the global semiconductor shortage would deteriorate further from the first three months of the year, when the crisis dragged down planned production by 11%.
The Fiat Chrysler-PSA Group merger said things would get worse in the second quarter before showing signs of improvement in the second half, according to a result. statement Wednesday.
Speaking on a call, CFO Richard Palmer warned the effects could linger until 2022.
“Visibility is still relatively limited,” Palmer said. “It would be unwise to assume that the problem will just go away.”
The chip shortage plaguing automakers around the world adds to the challenges of CEO Carlos Tavares as he seeks billions of dollars in savings from the merger between the two automakers. Palmer said the integration of the two companies remains on track, although it will take time to take full advantage of the combination.
Stellantis rose 1.4% to 14.10 euros in Paris. The title has gained around 10% this year.
First-quarter revenue increased 14% to 37 billion euros ($ 44.5 billion) on a pro-forma basis, while vehicle shipments consolidated on that basis increased 11% to about 1.57 million units. The semiconductor shortage has reduced planned production by 190,000 units during the period amid rolling shutdowns at some assembly lines, and Palmer said the blow is likely to be even more pronounced in the second quarter.
Industry spinoffs
In response to the shortage, the automaker has standardized electronic components in its portfolio rather than using special versions on certain models, according to Palmer. Eight of its 44 locations around the world are currently affected, he said.
Stellantis does not publish results on a quarterly basis. In Europe, BMW AG and Daimler AG reported better-than-expected results for the quarter, while Ford Motor Co. is planning a $ 2.5 billion has been earmarked for chip scarcity profits. Volkswagen AG publishes its results on Thursday.
Ford CEO Jim Farley said last week that the automaker expects to lose about 50% of expected production in the second quarter, down from 17% in the first quarter, and the problem could extend into 2022.
Renault SA also predicted that the biggest impact on production would come this second quarter, with lingering effects spilling over into the following three months. The French company has made the production of higher-margin cars a priority, which Stellantis is also doing.
Stellantis maintained its adjusted operating margin outlook of 5.5% to 7.5%, compared to 5.3% last year. About 80% of its € 5 billion in targeted annual savings will be achieved by the end of 2024, the company said.
The manufacturer reiterated that it expects industry sales to increase 10% in Europe this year and 8% in North America. The company said its new Jeep Grand Wagoneer and a next-generation Grand Cherokee remain on track for production at the end of the second and third quarters, respectively.
(Adds the sixth paragraph of the stock market reaction, the comments of the CFO of the seventh paragraph.)
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