Stellantis reports 4 billion euro cash drop in Q3

Stellantis generated a negative industrial free cash flow of 4 billion euros during the third quarter. The figure represents a slight improvement from the 4.3 billion euro shortfall recorded in the same period last year. The company posted the results on Wednesday while continuing its large-scale turnaround strategy.

The automaker, which owns the Chrysler and Jeep brands, reported that third-quarter revenues increased by 1% to 37.6 billion euros. Adjusted operating income rose 184% to 256 million euros, up from 90 million euros a year earlier. Stellantis shares gained 3.6% after European markets opened on the news. However, the stock has dropped 62% since the start of the year.

The company is executing a 60 billion euro turnaround strategy. This plan follows several years of declining sales, with North America identified as a particularly weak market. Stellantis reaffirmed its goal of achieving positive industrial free cash flow by 2027. The strategy involves 36 billion euros in investment across its automotive brands, with 60% of that total allocated to its North American operations.

CEO Antonio Filosa outlined the five-year FaSTLAne 2030 plan in May. The initiative includes launching new products, accelerating partnerships, and updating existing models. Filosa stated in the report that the company is making progress in the early execution of the plan. He noted that the firm is delivering meaningful improvements in manufacturing and quality.

European carmakers face increasing competition from domestic Chinese brands such as Xiaomi, BYD, and Geely. Porsche announced this week that it would reduce its exposure to the Chinese market as sales there decline. Mercedes-Benz attributed its third-quarter sales slump in the region to a challenging market environment.

Filosa told CNBC earlier this month that European regulators should encourage vehicle production within the region. The CEO argued for regulations that incentivize and reward companies that can demonstrate they design and engineer their own cars. He said these measures would help manufacturers fend off Chinese rivals.

The company intends to add new technologies to its product line as part of the restructuring effort. The next step in the timeline involves monitoring the allocation of the 36 billion euro investment fund. Stellantis will continue to report on the progress of the FaSTLAne 2030 plan in upcoming quarters.