Stellantis logistics problems limit European sales rebound

Stellantis continues to be dogged by logistic problems in Europe that are preventing the fast delivery of new cars to customers as production improves. The company flagged up the problem on its latest earnings call as being one of the few drags on sales growth amid increased revenues in the first three months of the year. “In Europe, the real issue continues to be outbound logistics,” outgoing chief financial officer Richard Palmer told analysts. “That’s still top of our list of our things to resolve.” The problem is continuing to shrink the market share of Stellantis brands in Europe – including Citroën, Fiat and Peugeot – as rivals take advantage of the improving supply-chain situation to ship greater numbers of cars. Stellantis sales grew 9.7% in the first three months of the year, compared with overall market growth of 24.4%, according to figures from the European automotive industry lobby group the ACEA. Peugeot’s first-quarter market share across the region was 5.6%, down from 5.9% the same period the year before; Opel-Vauxhall’s fell to 3.6% from 4.0%; and Fiat’s declined to 3.2% from 3.5%. Overall, Stellantis’s share in Europe dropped to 17.8% from 19.9%, while that of rival Volkswagen Group rose to 25.3% from 23.9% during the same period. “We still have a strong portfolio of orders, and our challenge continues to be fulfilling those orders,” Palmer said. “We’ve moved slower compared to the competition, so that’s hurting our share.” The issue of finding transport to move cars from factories to dealers has been affecting Stellantis’s European deliveries for almost six months. CEO Carlos Tavares promised in March that the company’s logistical issues deliveries would be sorted by the end of the month. “We have understood where the outbound logistics issues were. We are addressing them. They are multiple,” Tavares told analysts. Read more: Stellantis sets March deadline to resolve logistics woes Stellantis and other car makers in the region have been hit by a shortage of lorry drivers, as well as reduced port capacity. The company also suffered from a bumpy changeover to new logistics providers from previous partner Gefco, which Peugeot used to own, as well as dealing with issues arising from a new outbound logistics software platform. Stellantis is looking to expand its internal logistics company, i-Fast, which it inherited from Fiat Chrysler Automobiles. Logistical shortages are also increasing the price of vehicle delivery for the company, Palmer said. Stellantis's logistical problems have increased the number of cars it has in its inventory, which counts cars that are built but remain unsold. The figure topped 1.3 million as of March 31, up from 1.07 million on December 31. Of those, 384,000 were with the company as opposed to dealer stock, the highest number since 31 March 2020 – peak pandemic. Stellantis still has a high number of orders, Palmer said, without revealing what that number was, adding that this larger-than-normal order book should take the company through to the middle of the year. The second half of the year is less certain in terms of European orders, though. “We have seen some relative slow-down in order intake and a bit of change in mix,” Palmer said, referring to the type of models being orders. He said retail orders were slowing while business orders remained “relatively strong”. Despite Stellantis’s logistical problems in Europe, the company posted revenues of €47.2 billion (£41.6bn) in the first three months, which was up 14% and higher than analysts' expectations. No profit margin figures were given, but Stellantis said they were still in the predicted “double-digit” range.