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Stellantis won't race to split electric vehicles from fossil fuel cars

MILAN - Stellantis is not considering splitting its electric vehicle (EV) business from its legacy combustion engine operation, its finance chief said on Thursday, as the carmaker presented above-expectation revenue data for the first quarter. Chief Financial Officer Richard Palmer told analysts he did not see huge benefits in the kind of separations pursued by rivals such as France's Renault and U.S. Ford. "We need to manage the company and the assets we have through this transition," he said. "There are benefits to having the cash flow being generated by the internal combustion business for the investments we need to make." Palmer said the group, formed by a merger last year of Fiat Chrysler and Peugeot maker PSA, was not averse to considering adjusting its structure "but we aren't anticipating any big changes." Palmer's comments came after the world's fourth largest carmaker said its net revenue rose 12% to 41.5 billion euros ($44.1 billion) in the January-March period, as strong pricing and the type of vehicles sold helped offset the impact of the semiconductor shortage on volumes. That topped analyst expectations of 36.9 billion euros, according to a Reuters poll. Milan-listed shares were up 0.5% by 1415 GMT, in line with Italy's blue-chip index. The impact of the chip crunch was evident in the decline in shipment figures which fell 12% in the quarter to 1.374 million vehicles. It was a similar story for Germany's BMW which posted higher revenues on Thursday and a decline in car sales. Riding the Recovery Stellantis, whose brands also include Citroen, Jeep and Maserati, confirmed its 2022 forecasts for a double-digit adjusted operating income margin, after 11.8% last year, and a positive cash-flow despite supply and inflationary headwinds. Morgan Stanley analysts said after the results that Stellantis had better management than many peers and benefited from its significant exposure to a stronger U.S. economy and a European recovery from the COVID-19 pandemic. They also said it was less affected by a slowing Chinese economy. Palmer said it was important for the group to maintain double-digit margins and keep delivering positive cash flows. "A 12% increase in revenue with a 12% decrease in volumes indicates a very strong performance on price and mix, which augurs well for our margin performance," he said. He said semiconductor supply problems were expected to ease this year with continued improvements in 2023.

Automakers, dealers are rushing cars to Houston after Harvey

DETROIT — Houston-area car retailers and automakers are rushing to reopen dealerships and beef up inventory to replace many hundreds of thousands of vehicles damaged in flooding from Hurricane Harvey. Pete DeLongchamps, vice president for manufacturer relations at Group 1 Automotive, the third-largest U.S. auto dealer group, said the company prepared for the storm with a plan designed after Hurricane Katrina in 2005. This included moving moved inventory to higher ground and cleaning roof drains to avoid cave-ins. Group 1 thus lost a "relatively small percentage" of inventory and reopened its roughly 25 dealerships in the Houston and Beaumont area by Thursday. "Things have been moving fast and furious with a large number of tow-ins already," DeLongchamps said. "Our customers have lost a lot of vehicles, we need to help them replace." Harvey brought record flooding to Houston and killed at least 35 people. The storm is expected to briefly depress already slowing U.S. auto sales but could eventually help boost demand as damaged cars are replaced. Automakers report U.S. August sales on Friday. Estimates for the number of Harvey-damaged vehicles needing replacement range up to 500,000. By Thursday, AutoNation, the largest U.S. auto retail chain, had reopened its 17 Houston stores and is moving cars and trucks from other regions, company spokesman Marc Cannon said. The company plans to move 500 to 1,000 used cars to an AutoNation USA used car store and stage a sale Sept. 21-23, when many would-be buyers should have insurance checks to replace destroyed vehicles, Cannon said. AutoNation is still assessing how many vehicles it lost, but it too moved vehicles to higher ground ahead of the storm. General Motors spokesman Jim Cain said the number of damaged vehicles at dealerships "is relatively modest." "But there are still several dealerships that are inaccessible, so the number will increase," he said. GM will move new and used vehicles to Houston, "but it won't be done until the infrastructure and our dealers are ready." Ford is still assessing damage and inventory needs, a spokeswoman said. CarMax, the biggest U.S. used car dealer, will reopen its six Houston area stores on Labor Day, spokeswoman Claire Hunter said. "We are mobilizing additional inventory to the region as we speak," Hunter said. Paul Lips, chief operating officer at ADESA, a unit of KAR Auction Services Inc., which with Manheim dominates the U.S.

Could Chrysler leave Michigan for Tennessee?

Detroit's Big Three could become the Big Two. According to an AP report in The Detroit News, state officials have been lobbying for Fiat-Chrysler CEO Sergio Marchionne to select Tennessee as the location for Fiat's joint headquarters with Chrysler Group LLC.
This weekend, Marchionne met with Tennessee governor Bill Haslam at a ceremony celebrating the expansion of a Fiat subsidiary plant in the city of Pulaski. The AP report does not mention any serious talks about headquarters relocation, only that Tennessee officials have been "working me over pretty well," according to Marchionne.
Fiat hopes to complete its merger with the Auburn Hills-based automaker sometime next year, and earlier reports have stated that the company is seeking $10 billion in financing to buy the remaining bits of Chrysler. If the company were to relocate, it would join Nissan and Volkswagen in having major American automotive operations in Tennessee. Of course, that whole "Imported From Detroit" thing would need to go out the window, as well.