Core Insights - The company has decided to reverse its previous decision and revive a popular model after experiencing a decline in sales and facing dealer dissatisfaction [1] Group 1 - Sales have fallen significantly, prompting the company to reconsider its strategy [1] - Dealers have expressed their discontent, leading to a revolt against the company's earlier decisions [1] - The revival of the popular model is seen as a strategic move to regain market traction and dealer support [1]

Core Viewpoint - Stellantis' Ram brand is canceling the development of a full-size electric Ram 1500 pickup truck due to declining demand for electric vehicles in North America [2][4]. Group 1: Product Strategy Changes - The company has reassessed its product strategy and will discontinue the full-size battery electric vehicle (BEV) pickup, which was initially expected to launch by the end of 2024 [2]. - Ram will still introduce an extended-range electric truck, now renamed from "Ramcharger" to "Ram 1500 REV," which will feature an electric generator and a gas engine, expected to launch next year [3]. Group 2: Leadership and Market Context - New Stellantis CEO Antonio Filosa is reversing some initiatives from former CEO Carlos Tavares and is committed to making tough decisions to restore profitable growth [4]. - The overall auto industry is facing slower-than-expected adoption of electric vehicles, compounded by changes in government policies affecting EV incentives [4].

Group 1 - Stellantis is discontinuing the development of a full-size battery-electric vehicle due to slowing North American demand for such trucks [2] - The Ramcharger vehicle has been renamed to the now-shelved Ram 1500 REV, indicating a shift in strategy [2] - The re-named Ramcharger will be a hybridized light-duty pickup, reflecting a transition towards hybrid technology [2]

Core Insights - Stellantis is discontinuing its Ram 1500 electric pickup due to slow demand for full-size electric vehicles [1] Company Summary - The decision to axe the Ram 1500 electric pickup reflects the company's response to market conditions and consumer preferences [1] Industry Summary - The move indicates a broader trend in the electric vehicle market, particularly regarding full-size electric trucks, where demand has not met expectations [1]

Market Overview - The S&P 500 and Nasdaq 100 have reached new all-time highs, driven by expectations of Federal Reserve interest rate cuts [2][4] - The Dow Jones Industrials Index has decreased by -0.31% [1] - Higher bond yields are limiting stock market gains, with the 10-year T-note yield rising to 4.06% [3][8] Economic Indicators - The University of Michigan's September consumer sentiment index fell to a 4-month low of 55.4, below expectations of 58.0 [5] - Inflation expectations for the next 5-10 years increased to +3.9% from +3.5% in August, contrary to expectations of a decline [5][8] - Markets are pricing in a 100% chance of a -25 basis point rate cut at the upcoming FOMC meeting [6][9] Company Movements - Warner Bros Discovery (WBD) surged over +11% following reports of a potential acquisition bid from Paramount Skydance [13] - Tesla (TSLA) rose more than +5% after receiving approval for testing autonomous vehicles in Nevada [13] - Micron Technology (MU) increased by over +3% due to strong demand for AI chips, contributing to a +13% rally this week [14] - Super Micro Computer (SMCI) gained more than +2% after announcing high-volume deliveries of Nvidia systems [14] - Microsoft (MSFT) rose over +1% after reaching a preliminary agreement with OpenAI regarding their partnership [15] Declines in Stock Prices - Lululemon Athletica (LULU) fell more than -3% after a price target cut by Bank of America [16] - Oracle (ORCL) decreased over -3% amid reports of insider backing for a competing acquisition bid [17] - MGM Resorts International (MGM) declined more than -1% due to insider selling activity [18]

Market Overview - US equity futures are slightly lower, with small caps lagging as the stock rally appears to be losing momentum, while major indexes reached all-time highs [1] - The S&P 500 futures fell by 0.1%, while Nasdaq 100 futures remained positive due to strong tech performance, particularly from Microsoft [1] - European stocks showed subdued performance as investors await the Federal Reserve meeting next week, with the Stoxx Europe 600 Index little changed [7] Company Performance - Microsoft shares rose by 1% in premarket trading after avoiding a significant antitrust penalty from the EU, leading the Magnificent 7 stocks [3] - Adobe's stock increased by approximately 3% following a strong quarterly revenue outlook, indicating positive returns from AI investments [4] - Alaska Air gained 2% after receiving a buy rating upgrade from UBS, achieving a clean sweep of buy ratings among analysts [4] - Array Technologies saw a decline of 5% after being downgraded to underperform by BofA due to tariff impacts [4] - RH's shares fell by 8% after the company reduced its full-year sales outlook, citing new US tariffs affecting its seasonal catalog [4] - Super Micro Computer's stock rose by 5% after announcing the availability of its Nvidia Blackwell Ultra solutions [4] - Warner Bros. Discovery shares increased by 6%, continuing a significant rally after news of a potential bid from Paramount Skydance [4] Economic Indicators - Analysts expect small caps to outperform larger indices over the next twelve months, with a potential 20% advance in the Russell 2000 compared to an 11% increase in the S&P 500 [6] - The market anticipates between two to three quarter-point rate cuts by the Federal Reserve by year-end, with some traders betting on a half-point cut next week [3][5] Commodity and Currency Movements - Commodities showed mixed results, with oil and base metals prices rising, while precious metals experienced declines [1][12] - The dollar rebounded from previous losses, with the yen lagging behind G-10 currency peers [10] Geopolitical and Trade Developments - US Treasury Secretary Scott Bessent is set to meet with Chinese Vice Premier He Lifeng next week to discuss trade and economic issues [21] - The US is pressuring G7 countries to impose higher tariffs on India and China regarding Russian oil purchases, which may impact market sentiment [17][37]

Core Viewpoint - Stellantis is preparing to adapt its business strategy in response to the evolving U.S. tariff environment, with a focus on increasing revenues through new vehicle launches and addressing inventory issues [1][2][4][6]. Group 1: Tariff Environment - The CEO of Stellantis indicated that the final scenario regarding U.S. tariffs is becoming clearer, and the company is ready to take action based on this clarity [1][2]. - Stellantis has a significant manufacturing presence in the U.S., Mexico, and Canada, and is engaged in productive discussions with the Trump administration regarding tariffs [2][3]. - In the previous year, over 40% of Stellantis' 1.2 million vehicle sales in the U.S. were imports, primarily from Mexico and Canada, which are subject to a 25% tariff [3]. Group 2: Financial Impact and Strategy - Stellantis previously warned of a €1.5 billion ($1.8 billion) impact from U.S. tariffs for the current year, while also committing to new vehicle launches to reconnect with customers [4]. - The company's shares rose by 9.2% following the CEO's remarks, indicating positive market reception to the new strategy [4]. - The CEO emphasized that increasing revenues through new models is crucial for Stellantis' future strategy and cash generation [4][6]. Group 3: Product Strategy - Stellantis plans to reintroduce models such as the Jeep Cherokee and 8-cylinder RAM trucks, which were previously dropped and contributed to declining sales [5]. - The U.S. market is identified as the top priority for Stellantis, with a new business plan set to be presented in the first half of next year [5]. - The CEO stated that the immediate goal is to improve cash generation, with a focus on increasing revenue as a primary lever [6]. Group 4: Inventory Management - Stellantis has experienced a cash burn of over €9 billion ($10.6 billion) from 2024 to the first half of this year due to declining sales and profits, particularly in North America [6]. - The company has managed to bring inventories back to "very healthy" levels, addressing previous overhang issues [6].

Core Insights - Increasing revenues through new models is a key pillar of Stellantis' future strategy and a means to restore cash generation [1] Group 1 - The new CEO Antonio Filosa emphasized the importance of new models in driving revenue growth [1] - The strategy aims to enhance cash generation for the company [1]

Summary of Stellantis Conference Call Company Overview - **Company**: Stellantis - **CEO**: Antonio Filosa, appointed less than three months ago, has over 26 years of experience within the company [2][4] Key Priorities - **Business Growth**: Focus on new product launches, particularly in North America, where market share has declined from 12% to around 7% due to phasing out key nameplates [5][6] - **Flawless Industrial Execution**: Emphasis on improving operational efficiency and inventory management [10] - **Increased Profits**: Aim for visible improvement in business indicators on a quarterly basis [4] Product Launches - **New Product Actions**: - Return of the Hemi V8 engine in Ram 1500, with over 40,000 orders received shortly after announcement [6] - Introduction of the Dodge Charger with an internal combustion engine and a new Jeep Cherokee [6][12] - Plans for a Ram midsize pickup truck to fill a gap in the market [8] Inventory Management - **Dealer Inventory**: Significant reduction in aged inventory, with a focus on new and refreshed models for 2024 and 2025 [9][10] Market Expectations - **Jeep Cherokee Sales**: Anticipated to sell between 100,000 to 200,000 units annually, returning to a significant segment of the market [11][12] - **Financial Services**: Development of a financial services unit in North America expected to drive additional demand as interest rates stabilize [15] Regulatory Environment - **Tariffs and U.S. Administration**: Ongoing discussions with the U.S. administration regarding tariffs and incentives for U.S.-built vehicles [17][18] - **European Regulations**: Concerns over CO2 emission targets deemed unattainable, with suggestions for flexibility in regulations to stimulate demand [24][25] Collaboration and Synergies - **Leapmotor Partnership**: Successful collaboration with Leapmotor, which has seen significant growth in sales and aims to expand into new markets [29][30] Regional Performance - **Latin America**: Stellantis holds a 24% market share, nearly double that of the second player, with a strong focus on localization and understanding consumer needs [36][37] - **Middle East and Africa**: Plans for increased localization and product offerings to enhance market presence [37][38] Financial Outlook - **Cash Flow Management**: Aiming for gradual improvement in cash generation and profitability, with a focus on increasing revenue [40][41] - **Dealer Relationships**: Efforts to restore relationships with dealers after previous management issues, with positive reception of new products [44][48] Future Product Development - **Midsize Truck and REV**: Plans to introduce a Ram 1500 REV and a new midsize truck by 2027, with a focus on performance and market competitiveness [53][56] Conclusion - **Overall Strategy**: Stellantis is focused on revitalizing its product lineup, improving operational efficiency, and navigating regulatory challenges while maintaining strong market positions in key regions [4][24][36]

Economic Policy - Mexico's Economy Minister confirmed a significant increase in tariffs on light vehicles and auto parts from Asia, particularly China, raising the rate from 20% to 50% to bolster domestic production and address concerns over cheap imports [2][9] - This tariff increase is part of a broader economic plan aimed at boosting local manufacturing and reducing the fiscal deficit, expected to generate an additional 70 billion pesos (approximately $3.76 billion) in tax revenue for 2026 [2] Market Activity - Klarna experienced a strong public debut on the New York Stock Exchange, with shares starting at $52, a 30% increase from its initial public offering price of $40, raising $1.37 billion in its IPO, making it one of the largest IPOs of the year [3][9] - The latest US 10-Year Note sale indicated healthy investor appetite, with the high yield rate decreasing to 4.033% from 4.255%, and the bid-cover ratio improving to 2.65 [6][9] Corporate Developments - Paramount Global announced the appointment of Dane Glasgow as Chief Product Officer, focusing on leading the company's product vision and strategy, particularly in digital platforms and AI capabilities [4][9] - Stellantis is moving forward with the sale of its VM Motori engine plant in Italy to industrial investors, indicating a strategic shift in its global manufacturing footprint [5][9]