06:39 AM EDT, 09/30/2024 (MT Newswires) -- Stellantis' ( STLA ) US-listed shares dropped early Monday after the automaker slashed its full-year adjusted operating income margin and free cash flow projections amid deteriorating global industry trends.

The parent company of Chrysler and Jeep now expects its adjusted operating income margin to be between 5.5% and 7% for 2024, down from its previously projected double-digit range. Roughly two-thirds of the lowered guidance is due to the company's corrective measures in North America, while lower-than-expected sales across most regions in the second half were among other contributing factors, Stellantis ( STLA ) said.

The group is now targeting no more than 330,000 units of dealer inventory in the US by the end of the year instead of the first quarter of 2025. The company will cut North American shipments by more than 200,000 vehicles in the second half, up from its previous objective of 100,000 units. It will also increase incentives on 2024 and older model vehicles and adjust costs and capacity.

Stellantis ( STLA ) shares on the New York stock exchange fell 12% in premarket activity.

The global industry outlook has weakened, with 2024 market forecasts now lower than earlier projections, the auto manufacturer said in a statement. Competition has also "intensified" due to rising industry supply and increased competition from China, according to the company.

Industrial free cash flow is now pegged at negative 5 billion euros ($5.6 billion) to negative 10 billion euros ($11.19 billion), a shift from the prior positive forecast, amid lower adjusted operating income outlook and the impact of temporary higher working capital in the second half, Stellantis ( STLA ) said.

"The company will continue to leverage and expand its competitive differentiators and believes that the recovery actions being put in place will ensure stronger operational and financial performance in 2025 and beyond," according to Stellantis ( STLA ).

In 2023, the company's adjusted operating income margin came in at 12.8%, while it recorded industrial free cash flow of 12.86 billion euros.

Price: 13.98, Change: -2.08, Percent Change: -12.95