Stellantis and Renault improve profitability through model changes

Unprecedented profitability and record margins, despite sales impacted by commodity inflation, the semiconductor crisis and the effects of the war in Ukraine. For Stellantis, the first semester is that of all superlatives. Renault’s image is less flamboyant, but it confirms the recovery of a group that has nonetheless been forced to withdraw from a very lucrative Russian market. The two manufacturers, who published their balance sheet on Thursday, July 28th and Friday, July 29th, not only share the ability to demonstrate resilience. These half-year results also constitute a break with the volume logic and the switch to a model that relies on cars that are produced on a smaller scale but sold at a higher price.

Carlos Tavares, who not so long ago denounced the destabilizing effects of accelerating the transition to all-electric propulsion, doesn’t have such a tough tooth anymore. The exceptional first-half results announced by the CEO of Stellantis (a 17% increase in sales, a net profit of 8 billion euros and an operating margin of 14%) are largely attributable to the electrified models. These are a major contributor to Stellantis’ profitability, particularly pronounced in North America (where operating margin reached 18%), eight points higher than in Europe, where sales declined more than the market. The group has opted for rechargeable hybrid engines rather than traditional hybrid engines and has no specific electric engine platform.

also read Article reserved for our subscribers Automotive: Stellantis record results, the result of the tough Tavares method

Stellantis, whose sales are down 7%, is plowing the furrow of a value-driven strategy by using the constraints weighing on production to raise its prices. “We have decided to favor vehicles that generate the largest margin to the detriment of others. This is the best way to protect the company.”believes the CEO, who is happy about the achievement “A 40% breakeven point”. “That means we could handle a 60% drop in our volumes and still be profitable.”, Mr Tavares justifies. In the case of semiconductors, on the other hand, he is quite optimistic about sustained increases in energy prices and fears a global recession. However, it confirms the ambition to double the group’s sales by 2030 and the target of an operating margin “Double Digits Over the Decade”.

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Kaddouri Ismail

I am Ismail from Morocco, I work as a blogger and online marketer. I am also the founder of the “Mofid” site, in which I constantly publish many important articles in the field of technology, taking advantage of more than 5 years of experience working in the field. I focus on publishing in a group of areas, the most important of which are programming, e-marketing, digital currencies and freelance work.

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