MILAN — Stellantis softened up investors ahead of its electrification strategy event on Thursday by hinting that it had a better-than-expected start to 2021 despite a chip shortage that has hit automakers worldwide.
The company said its first-half margins on adjusted operating profits were expected to exceed an annual target of between 5.5 percent and 7.5 percent.
Positive pricing and product mix helped it to expect a “strong margin performance” in the first half, Stellantis said in a statement ahead of its “EV Day 2021” strategy event.
“The global Stellantis team has also responded strongly to volume constraints caused by semiconductor shortages, implementing very effective cost control measures,” the automaker said.
Stellantis, which has 14 brands including Peugeot, Opel, Jeep, Chrysler, Ram and Maserati, faces an investor community keen for a road map to an electrified lineup to rival Tesla.
Stellantis said that, in line with previous forecasts, it expected a negative industrial free cash flow in the first half, also caused by the negative impact of lower than planned production volumes.
It added, however, that synergies were well on track to exceed the first year’s target, helping to “materially contribute to the full year cash flow performance, which is still expected to be positive.”
Formed in January by the merger of Fiat Chrysler Automobiles and PSA Group, Stellantis has promised more than 5 billion euros ($5.9 billion) in annual synergies.
During its “EV Day 2021,” Stellantis will disclose significant investments in electrification technology and connected software as it aims to be an industry front-runner.
In April, CEO Carlos Tavares said it would offer low-emission versions — either battery or hybrid electric — of almost all of its European models by 2025, and they should make up 70 percent of European sales and 35 percent of U.S. sales by 2030.