Stellantis (STLAM) Goldman Sachs 16th Annual Industrials & Autos Week summary

Management changes and strategic direction

• Guidance for 2024 reaffirmed: AOI between 5.5%-7% and negative free cash flow of -$5B to -$10B.

• Recent management changes stemmed from tactical disagreements on short-term priorities and stakeholder engagement, not long-term strategy.

• No change expected in long-term strategy, including multi-energy platforms, asset-light China approach, and regional diversification.

• Focus on rebuilding trust with key stakeholders such as dealers, suppliers, unions, and governments.

Product launches, market share, and pricing

• Inventory targets achieved ahead of schedule, with U.S. dealer inventory dropping below 310,000 units in November.

• Market share loss in North America attributed to both ambitious pricing and lack of products in key segments; pricing has since been adjusted.

• Major new product launches planned for 2024-2025, including Cherokee replacement, new Charger, Wagoneer S, Recon, and new HD pickups.

• European product delays due to new multi-energy platforms and software complexity; key launches like C3 Aircross, Opel Frontera, and Fiat Grande Panda expected in early 2024.

Cost management and operational flexibility

• Price reductions on key Jeep models offset by lower incentives and cost engineering efforts.

• Ongoing focus on sourcing from low-cost regions and leveraging global supply chain expertise.

• Flexible manufacturing footprint in North America allows for production shifts in response to potential tariff changes.