List of European Auto Makers Cutting Guidance Continues to Grow — At a Glance

Car makers Stellantis and Aston Martin on Monday became the latest in a series of automotive companies across Europe to cut their guidance.

Stellantis, which houses Dodge, Chrysler, Citroen, Peugeot and Fiat among others, warned of an increasingly tough car market with conditions deteriorating from earlier expectations. Meanwhile, U.K. luxury car maker Aston Martin said weak demand in China and supply-chain disruptions would hurt deliveries.

Here is a list of the companies in the sector that have recently warned on their outlook:

-- Stellantis on Monday said it is accelerating plans to trim inventory levels in the U.S. as the global industry continues to deteriorate and competition intensifies. It now targets no more than 330,000 units of dealer inventory in the U.S. by year-end 2024, bringing forward the target date from the first quarter of 2025. It will reduce the number of vehicles it ships to the U.S. by more than 200,000 in the second half of 2024 after earlier expecting to cut shipments by 100,000 units compared to the prior year. The company will also increase incentives while adjusting costs and capacity. The adjusted operating income margin this year is now seen at between 5.5% and 7.0%, down from the double-digit figure it expected previously. Industrial free cash flow is now expected to be between negative 5 billion euros and negative 10 billion euros ($5.58 billion-$11.17 billion), from a positive figure previously.

--Aston Martin also said Monday that supply-chain issues and weak demand in China are weighing on its volume outlook for the remainder of the year. A growing number of components are arriving late due to disruptions at several suppliers, which means vehicles are taking longer to complete and deliver, it said. The company said wholesale volumes and adjusted Ebitda for the third quarter would fall short of market expectations.

-- Germany's Volkswagen slashed its sales and profitability forecasts for the year on Friday citing a deterioration in the macroeconomic environment. It said it expects to deliver about 9 million vehicles this year down from the 9.24 million it delivered a year ago. Sales are seen at around 320 billion euros for the year, compared with 322.3 billion euros it reported last year. It has previously targeted a 3% increase in deliveries and 5% rise in sales. Its return on sales is expected at roughly 5.6%, down from previous guidance of 6.5% to 7%.

-- Porsche SE also reduced its guidance for the year due to its 31.9% holding in Volkswagen. It said on Friday that it expected 2.4 billion euros to 4.4 billion euros in after tax profit, having previously seen between 3.5 billion euros and 5.5 billion euros.

-- Mercedes-Benz earlier this month warned that appetite in China--the world's largest market for cars--was particularly weak as its real-estate sector weighed on its economy. The company cut its margin guidance for the second time in under two months amid weakness in the country. In revised guidance, the German luxury carmaker said its cars unit is now expected to post an adjusted return on sales of between 7.5% and 8.5% this year, down from a prior outlook of between 10% and 11%. Earnings before interest and taxes are now expected to be significantly below the prior year's level.

-- BMW lowered its sales and earnings targets in mid-September, saying expensive measures to fix a braking-system problem and muted demand in China would dilute its bottom line. BMW's electric vehicle sales have been stronger than rivals' year-to-date, but in the second quarter, Chinese sales fell 4.8% year-on-year as the threat from domestic rivals continues to grow. The luxury carmaker slashed its full-year EBIT margin for its automotive division--its key profitability metric--to between 6% and 7%, from a prior range of 8% to 10%.

-- Swedish car manufacturer Volvo Car trimmed its 2026 earnings targets in early September and abandoned plans to solely sell EVs by the end of the decade. The company attributed the guidance cut to complex market conditions and the impact of global trade tariffs imposed by the U.S. and EU on China--heightened by potential Chinese retaliation. Volvo now expects an EBIT margin of 7%-8% in 2026, down from its previous goal of above 8%, and watered down its 2026 revenue goal by dropping a specific target and opting instead to measure success by whether it outperforms the premium car market.

Write to Barcelona editors at barcelonaeditors@dowjones.com

(END) Dow Jones Newswires

September 30, 2024 06:51 ET (10:51 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.