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]

Core Insights - The automotive sector is represented by two contrasting companies: Ferrari, known for high-performance luxury cars, and Stellantis, which focuses on mass-market brands [1][2] Ferrari Overview - Ferrari's financial strength is attributed to its ability to increase profitability per car while maintaining strong demand, with 81% of new cars sold to existing customers in 2024 [3] - The company's pivot to hybrid vehicles has been a key profitability driver, lifting EBITDA margins to 38.3% in Q2 2025, with hybrids making up 58% of shipments [4][9] - Ferrari's brand generates additional revenue streams, with 12% of income coming from sponsorships, licensing, and merchandise, providing stability against market downturns [5] - The Zacks Consensus Estimate projects a 14% year-over-year gain in EPS for Ferrari in 2025, indicating a consistent growth trajectory [14] Stellantis Overview - Stellantis faces significant challenges, particularly in North America and Europe, which account for nearly 70% of total sales, with sales trending lower and margins under pressure [6][8] - The company is revamping its product lineup to improve sales and margins, focusing on models like the Jeep Cherokee and Dodge Charger [7] - Stellantis reported revenues of €74.3 billion in H1 2025, but the adjusted operating income margin fell to 0.7%, down from 10% the previous year, with negative industrial free cash flow of €3 billion [8][9] - Analysts forecast a 54% year-over-year drop in EPS for Stellantis in 2025, with a further 97% decline expected in 2026, highlighting severe operational headwinds [15] Valuation Comparison - Ferrari trades at a premium with a forward P/E ratio of over 41, reflecting its stable, high-margin business model [12] - Stellantis trades at a significant discount with a forward P/E of just 5x, indicating market concerns about its operational challenges [12] Price Performance - Over the past year, Ferrari's stock (RACE) is down 2.6%, demonstrating resilience, while Stellantis (STLA) has seen a significant decline of over 40% [10]

Core Points - The 2026 Dodge Durango will feature a standard HEMI V-8 engine across all models, enhancing power, performance, and value for customers [1][3][4] - The Dodge Durango has seen a significant increase in sales, with Q2 U.S. sales rising over 50% compared to Q1, leading to its top position in the upper midsize SUV segment according to the J.D. Power 2025 U.S. APEAL Study [4] Model Specifications - The Durango GT will now include a 5.7-liter HEMI V-8 engine, providing 65 more horsepower than the previous V-6 model, starting at a U.S. MSRP of $42,495, making it the most affordable AWD V-8 vehicle in the industry [6][8] - The Durango R/T will be available with a 392 HEMI V-8 engine, delivering 475 horsepower and 470 lb.-ft. of torque, a 115-horsepower increase over the previous model, and priced under $50,000 [10][8] - The Durango SRT Hellcat will maintain its status as the most powerful gas-powered SUV, featuring a supercharged 6.2-liter HEMI V-8 engine with 710 horsepower and a starting MSRP of $79,995 [10][11] Performance Enhancements - The new Durango models will offer improved performance metrics, including a 0-60 mph time reduction from 7.4 to 6.2 seconds, 22% more horsepower, and 50% more torque [9][8] - The towing capacity for the Durango R/T has increased by 40%, now capable of towing up to 8,700 pounds [9][4] Customization Options - The 2026 Dodge Durango SRT Hellcat Jailbreak will offer extensive customization options, allowing for over six million combinations, including various wheel options, exterior colors, and interior configurations [12][13]

Financial Data and Key Metrics Changes - Consolidated shipments decreased by 7% to 2,700,000 units, with declines in North America and large Europe, partially offset by growth in South America and the Middle East and Africa [10] - Net revenue fell by 13% to €74 billion, impacted by adverse regional mix and lower pricing [10] - Adjusted diluted earnings per share and industrial free cash flow showed improvement compared to 2024, despite an outflow of €3 billion in the first half [11][12] - AOI margin was compressed to 70 basis points, reflecting a significant increase in industrial costs [13] Business Line Data and Key Metrics Changes - North America and Europe are in turnaround phases, while South America and Middle East and Africa are delivering consistent results [15] - In North America, performance was affected by tariffs and lower fleet performance, while Europe saw a 13% decline in LCV volumes [16] - South America maintained market share leadership, with industry growth in Brazil and Argentina [16] Market Data and Key Metrics Changes - North America and Europe are experiencing a recovery, with North America showing a 90% year-over-year improvement in order books [34] - European market share increased to 17%, up 1.3 percentage points from H2 2024, with significant growth in BEV and hybrid vehicle sales [35][36] Company Strategy and Development Direction - The company is focusing on growth, execution, and profitability, with a lineup of new vehicles and powertrains [24] - Key actions include launching new products, improving inventory discipline, and reestablishing financial guidance for the second half of 2025 [19][20] - The leadership team is committed to making tough decisions to accelerate business recovery [20] Management's Comments on Operating Environment and Future Outlook - The first half of 2025 was challenging, but there are signs of improvement, with expectations for gradual sequential acceleration in the second half [19][40] - The company is addressing past mistakes by reintroducing successful nameplates and adjusting product strategies to meet customer demand [73] Other Important Information - Industrial liquidity at the end of H1 was €47 billion, with €31 billion in cash and liquid securities [17] - The expected net tariff expense for the year is projected to be around €1.5 billion due to increased production levels [18] Q&A Session Summary Question: Focus on U.S. Market and Profitability Improvement - Management emphasized growth in North America through new product launches and optimizing the mix between ICE and electrified models [45] Question: Cash Flow and Balance Sheet Strength - Management acknowledged high cash burn but noted a significant reduction and expected further improvement in the second half [54] Question: Brand Portfolio Strategy - Management recognized the strength of their iconic brand portfolio and is working on better management and efficiency [60] Question: Pricing Pressure in Europe - Management indicated that market share is improving, and they expect better profit generation in H2 despite industry challenges [66] Question: Relationship with U.S. Dealers - Management reported improved dialogue with dealers, resulting in a 90% year-over-year increase in order inflow [85] Question: Guidance on Free Cash Flow - Management expressed commitment to gradual improvement in cash flow, with expectations for increased volumes and better pricing in the second half [92]

Financial Data and Key Metrics Changes - Consolidated shipments decreased by 7% to 2,700,000 units, with declines in North America and large Europe, partially offset by growth in South America and the Middle East and Africa [9] - Net revenue fell by 13% to €74 billion, impacted by adverse regional mix and lower pricing [9][10] - Adjusted diluted earnings per share and industrial free cash flow showed improvement compared to 2024, despite an outflow of €3 billion in the first half [11][12] - AOI margin was compressed to 70 basis points, reflecting a significant increase in industrial costs [13] Business Line Data and Key Metrics Changes - North America and Europe are in turnaround phases, while South America and Middle East and Africa are delivering consistent results [16] - In North America, performance was affected by tariffs and lower fleet performance, while Europe faced a 13% decline in LCV volumes [17] - South America maintained market share leadership, with industry growth in Brazil and Argentina [17] - Middle East and Africa experienced FX headwinds but continued to show business momentum [18] Market Data and Key Metrics Changes - North America saw a significant impact from tariffs, with expectations of €1.5 billion in net tariff expenses for the year [20] - European market share increased to 17%, up 1.3 percentage points from H2 2024, driven by new product launches [39] - The company is now the second in European BEV volumes and first in hybrids [40] Company Strategy and Development Direction - The company is focused on growth, execution, and profitability, with a lineup of new vehicles and powertrains [27] - Key actions include ending unprofitable initiatives and launching products that align with customer needs [24][25] - The leadership team is committed to making tough decisions to accelerate business recovery [23] Management's Comments on Operating Environment and Future Outlook - The first half of 2025 was challenging, but there are signs of improvement and a commitment to sequential growth in the second half [7][21] - The company aims to improve AOI margins and free cash flow in the second half, with expectations of increased net revenues [21] - Management acknowledges the need for ongoing adjustments to address market challenges and improve profitability [42] Other Important Information - Industrial liquidity at the end of H1 was €47 billion, with €31 billion in cash and liquid securities [19] - The company is updating its long-term strategic plan, to be presented at the Capital Markets Day in early 2026 [45] Q&A Session Summary Question: Focus on U.S. Market and Profitability Improvement - Management emphasized growth in North America through new product launches and optimizing the mix between ICE and electrified models [50][51] Question: Cash Flow and Balance Sheet Strength - Management acknowledged high cash burn but noted a reduction in the cash burn rate and a focus on achieving positive cash flow [60][61] Question: Brand Portfolio Strategy - Management highlighted the importance of managing a diverse brand portfolio effectively and indicated that updates would be provided at the Capital Markets Day [64][66] Question: Pricing Pressure in Europe - Management noted that while pricing pressure exists, market share is improving, and new products are expected to enhance profitability [70][72] Question: Diagnosis of Profitability Decline - Management identified the phase-out of successful nameplates as a key issue and is working to restore these products to improve market share [78][79] Question: Relationship with U.S. Dealers - Management reported improved dialogue with dealers, resulting in a significant increase in order inflow [90] Question: Guidance on Free Cash Flow - Management expressed commitment to improving free cash flow in H2, despite external headwinds and tariff impacts [95][96]

Core Viewpoint - The appointment of Antonio Filosa as the new CEO of Stellantis is seen as a pivotal moment for the company, which faces significant challenges in revitalizing its performance and restoring relationships with stakeholders after a period of decline under the previous leadership [1][4][14]. Group 1: Leadership Transition - Antonio Filosa, who has been with the company for 25 years, emphasizes the importance of avoiding mediocrity and aims to channel the leadership style of his mentor, Sergio Marchionne, to turn around Stellantis [1][2][4]. - Filosa's leadership style is described as engaging and collective, with a strong understanding of the business from factory operations to executive levels [3][17]. - The previous CEO, Carlos Tavares, resigned amid declining sales and profit, with Stellantis experiencing a 70% drop in net profit last year [5][14]. Group 2: Challenges Ahead - Filosa faces the challenge of mending relationships with dealers, employees, and politicians that were strained during Tavares' tenure, as well as managing the transition to electric vehicles [6][8]. - Stellantis' global sales fell 12.3% from 6.5 million in 2021 to 5.7 million in 2024, with a significant 27% drop in U.S. sales during the same period [11]. - The company is currently experiencing a product shortage, which has contributed to a 12% decline in overall sales during the first quarter of the year compared to the previous year [12]. Group 3: Market Position and Financial Performance - Stellantis' revenue decreased by 17.2% year-over-year in 2024 to €156.9 billion ($180.6 billion), contrasting with growth seen by competitors like General Motors and Ford [13]. - Filosa's immediate priorities include revitalizing U.S. market performance and addressing the extensive 14-brand portfolio of Stellantis [14][20]. - Investor confidence appears to be low, with shares declining 3.2% upon Filosa's appointment and continuing to drop by approximately 10% since then [23].

Core Insights - Dodge is enhancing its performance SUV lineup for the 2026 model year, particularly focusing on the HEMI®-powered Dodge Durango R/T with new packages and features [1][2][3] Product Features - The 2026 Dodge Durango lineup includes the Durango GT, Durango R/T with a 5.7-liter HEMI V-8 engine delivering 360 horsepower and 390 lb.-ft. of torque, and the 710-horsepower Dodge Durango SRT Hellcat, the most powerful gas engine SUV [4][5] - The new 2026 Dodge Durango R/T Blacktop Redline package features 20-by-8-inch Black Noise wheels, blacked-out HEMI and Dodge badging, and SRT spoilers [7][10] - The R/T model will also have a refreshed wheel lineup, including 20-by-10-inch lightweight Forged Lights Out wheels [14] Pricing and Availability - The starting U.S. MSRP for the 2026 Durango GT is $38,495, while the Durango R/T starts at $49,995, excluding destination costs of $1,995 [8][12] - The optional R/T Blacktop Redline package is available for an additional $3,495, and the Tow N Go package for $5,990 [7][12] Sales Performance - Retail sales of the Dodge Durango increased by 64% in Q1 year-over-year, indicating strong consumer demand for the model [5] Safety Features - The Dodge Durango offers over 60 available safety and security features, including standard Blind-spot Monitoring and multiple airbag systems [6]