(News Bulletin 247) – The automaker unveiled revenues in line with expectations in the first quarter. But the market remains concerned about the evolution of prices and demand in the coming months.

Stellantis does not usually disappoint expectations. The automotive group with 14 brands inherited good practices from PSA, which systematically published results in line or above expectations.

This is still the case in the first quarter. Over the first three months of the year, the group born of the merger in January 2020 between PSA and FCA generated revenues of 47.2 billion euros, up 14% over one year. As Royal Bank of Canada points out, revenue exceeded consensus by more than 3%, which stood at 45.98 billion euros, according to the Canadian bank.

The company’s turnover was both driven by the recovery in volumes, which had an impact of 2.7 billion euros (i.e. 6.5%), while the “pricing”, it is the price increases, have supported the turnover to the tune of 2.3 billion euros (or 5.5%). Sales of electric vehicles alone have, in volume, increased by 22% in volume over one year.

Inventory increase

The group’s inventories increased, standing at 1.3 million at the end of March against 807,000 a year earlier due to logistical difficulties. “I think it’s more a question of making sales than a subject of stocks,” said chief financial officer Richard Palmer, quoted by Reuters, for whom the production and delivery of the group’s large order book remains a challenge. “I think our stock level (…), given the level of sales where we are, is reasonably located,” he added.

Stellantis unsurprisingly confirmed its loose targets for fiscal 2023, namely a double-digit trading operating profit margin (i.e. at least 10%) and positive cash generation.

On the Paris Stock Exchange, the Stellantis action hardly benefits from this publication, the title falling by 2% around 10:30 a.m., the largest drop in the CAC 40.

“The publication comes out without any big surprise, slightly above expectations, with revenues a little better than expected in North America, which is positive, but a little below expectations in Europe”, explains Valentin Mory, analyst at the office of AlphaValue independent studies.

UBS points out for its part that the group’s American comparables (Ford, General Motors) had published results that exceeded expectations more than Stellantis.

Pricing concerns

“Overall the release is not good enough to eclipse the fears the market has about the potential downside price and demand environment in the coming months. On this the release does not add any real information on the evolution of prices, which for the moment are holding up well”, continues Valentin Mory.

The market fears that the recent and numerous price cuts made by Tesla will put pressure on all market players and weigh on the prices of new vehicles. These fears had notably plunged the Renault action two weeks ago.

But for now, manufacturers refuse to play Tesla’s game. Carlos Tavares, CEO of Stellantis, said so very clearly last week during a visit to a group site in Moselle.

“Stellantis doesn’t need to answer Tesla because the price of our vehicles is much lower than Tesla’s. So for us it’s not a pressing question, it’s a question for Tesla who was (at times price levels) very high compared to the rest of the market”, he explained. “If everyone goes crazy and puts the automakers in the red, we’ll see,” added the leader, however.

Both the managing director of Renault, Luca de Meo, and more recently its financial director, Thierry Piéton, have also dismissed out of hand the idea of ​​lowering prices. This even if analysts point out that the Megane E-Tech of the diamond group evolves in a sensitive price zone compared to Tesla vehicles, in particular the Model 3.