Yahoo Finance Fiat and PSA-merged car group Stellantis enjoys surging sales post merger
Watch: Stellantis reports earnings beat in first quarter since merger
Stellantis (STLA) — the new car company formed by the merger of Fiat Chrysler and PSA groups — is off to a good start as revenues in the company, since the merger, rose in the first three months of the year.
The group said first-quarter revenue rose 14% to €37bn ($44.5bn, £32bn), while consolidated vehicle shipments were up 11% to around1.57 million units, the company said in a statement on Wednesday.
Despite the growth, the company warned the impact of the global shortage in semiconductor chips, prevented a stronger rebound from industrywide plant shutdowns due to the COVID-19 pandemic.
The chip shortage cut planned production by 190,000 units in Q1 amid rolling halts of some assembly lines, according to the company's chief financial officer Richard Palmer.
Palmer, cautioned the impact will likely be more pronounced in Q2 and linger into 2022.
The automaker has normalised electronic components across its portfolio rather than using special versions on some models, to curb the hit from the shortage, Palmer said.
Eight of Stellantis' 44 global sites are currently affected, according to the CFO.
Stellantis became the fourth largest carmaker in the world after Fiat Chrysler and Peugeot maker PSA finalised their merger, earlier this year in a $52bn (£38.1bn) deal.
Shares in the company rallied 5.7% in Milan on Wednesday, but closed down 1% overnight in New York.
"In our first quarter since the Merger, Stellantis posted strong Q1 2021 revenues with the diverse brand portfolio driving increased volumes, positive pricing and improved product mix, despite the headwinds from the global semiconductor crisis," Palmer said.
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Leading car companies have been struggling with chip shortages as the COVID pandemic led to increased demand in other markets such as smartphones and other consumer electronics.
A host of other car firms, including Volkswagen (VOW.DE), Jaguar Land Rover, Mini, Nissan (7201.T), Renault (RNO.PA) and Honda (HMC), halted production at their plants due to the crisis.
Other carmakers have made similar moves. Last month, US car company Ford (F) announced that it will cut car production due to the global chip shortage and said profits could be hit by $1bn.
Meanwhile, General Motors (GM) warned that it could face a $2bn profit hit.
The situation has been made worse as car companies are competing with technology firms, who have also experienced delays and shortages for the chips.
The semiconductors are used by a range of computer companies such as Microsoft (MSFT) and Sony (SONY), the makers of the Xbox and PlayStation games consoles, as well manufacturers like Samsung (005930.KS) which makes phones, TVs and refrigerators.
Samsung’s co-chief executive, Koh Dong-jin, who also heads its mobile business unit, said last month that there is a “serious imbalance” in the pecking order of who is getting the limited supplies of chips.
Last year Apple (AAPL), the world’s biggest buyer of semiconductors, was forced to delay the launch of the much-hyped iPhone 12 by two months due to the shortage.
Watch:Global chip shortage wreaks havoc on various industries
