Stellantis close to final scenario on tariffs with US administration, CEO says

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].