(AOF) – The shareholders of the GAC-FCA joint venture, Guangzhou Automobile Group Co., Ltd., and Stellantis NV, have approved a resolution authorizing the joint venture to file for bankruptcy, in the context of a loss. The European automaker fully wrote down the value of its investment in the GAC-FCA joint venture and other related assets in its first-half 2022 financial results. Stellantis will continue to provide quality services to current and future customers of the Jeep brand in China.
AOF – LEARN MORE
Key points
– Sixth largest automobile group in the world – 3
th
American with 11% market share and 2
th
European with 20%, born in January 2021 from the Peugeot-Fiat Chrysler Group merger;
– Turnover of €162 billion achieved under 14 brands – Alfa Romeo, Chrysler Citroën, DS, Jeep, Opel, Peugeot, etc. -, mainly in North and South America and in Europe;
– Business model adapting the group to the new uses of motorists and the electrification of vehicles via digital transformation, the internal culture of performance (high industrial competitiveness) and social responsibility;
– Capital with 4 main shareholders: the holding company of the Agnelli Exor family for 14.4%, the Peugeot family for 7.2%, the Chinese Dongfeng for 5.6% and bpi France for 5.66%, John Elkann chairing the board of directors of 11 members and Carlos Tavares being managing director;
– Sound financial position: €59.7 billion in available industrial liquidity and €56 billion in equity, against a debt of €34 billion.
Challenges
– “Dare forward 2030” strategic plan: maintenance of a breakeven point at less than 50% of invoicing and operating margins of more than 2 figures / doubling of turnover, including a quadrupling in the high end, a a quarter realized outside Europe and North America (€20 billion in China) and a third from online sales, from 2024, $5 billion in cash from synergies;
– Innovation strategy: increase in battery capacity to 400 GWh / fuel cell/hydrogen combination for large utilities / new venture capital fund of 300 M€ for advanced technologies / strategic partnerships – Foxconn, Archerl, Engie , Mercedes-Benz, Total, Samsung, Amazon… and academies in digital & data and electricity;
– Environmental strategy aiming for carbon neutrality in 2038 with a 50% reduction by 2030: 100% electric vehicles in Europe and 50% in the United States by 2030, i.e. a total of 5 million per year / new division circular economy – purchase of the reconditioner Stimcar and launch, on 2
n/a
semester, of a circular hub in Europe / partnerships, in particular with Waymo (“Delivery as service” eco-responsible);
– Electrification and software plans with €30 billion in investments by 2025;
– Integration of the Share now specialist -5 million customers worldwide;
– Securing the battery ecosystem by 5 giga-companies in Europe and North America, by partnerships and by strengthening the supply of lithium hydroxide.
Challenges
– Persistent shortages of semiconductors leading to a decline in automobile sales and inventories in Europe;
– Execution of synergies –€3.2 billion in net cash in 2021 out of €5 billion expected in 2024;
– Advances in financing activities in the United States and Europe, with high profitability;
– Increase in the operating margin of European activities;
– After a 17% increase in revenues and an improved operating margin of 270 basis points in 1
er
semester, 2022 target of a double-digit operating margin and positive free cash flow.
A paradoxical performance
Data from EY highlights that the performance of the world’s top 16 manufacturers was particularly strong in 2021. While the average margin has fallen for three years in a row, from 6.3% in 2017 to just 3.5% in 2020 , this margin stood at 8.5% in 2021. This level is a record for ten years. However, the context was particularly hectic for manufacturers, faced with unprecedented shortages of components. Global sales fell 14% in 2020, the year of the health crisis, to rebound by only 5% in 2021. However, last year, players were able to reap the benefits of their efforts on their fixed cost structure. .