Stellantis (STLA) reported a double-digit increase in second-quarter vehicle shipments, supported by stronger volumes in North America and Enlarged Europe, even as HSBC warned that elevated U.S. inventories could force the automaker to cut prices.
The company estimated consolidated shipments of 1.6 million vehicles for the three months ended June 30, representing a 10% increase from the same period last year.
Stellantis defines shipments as vehicles delivered to dealers and distributors or sold directly to retail and fleet customers. These volumes generally form the basis for revenue recognition.
The year-over-year improvement was driven primarily by growth in North America and Enlarged Europe. However, gains were partially offset by lower shipments in the Middle East and Africa, where regional conflict disrupted performance.
Volumes also declined in South America, largely due to weakness in the Argentine automotive market.
Despite the shipment growth, HSBC analyst Michael Tyndall downgraded Stellantis to “Reduce” from “Hold” and lowered the bank’s price target to 4 euros from 5.50 euros.
Tyndall pointed to the automaker’s elevated inventory levels in the United States as a key concern. According to Motor Intelligence data cited by the analyst, Stellantis had 93 days’ supply of vehicles in June, with inventory approximately 120,000 units higher than a year earlier.
HSBC warned that Stellantis may need to reduce prices to bring inventories under control, potentially putting further pressure on margins. The bank said it does not see a sustainable recovery in the company’s earnings and questioned the strategy behind allowing inventories to rise again.
