Stellantis NV on Monday lowered its annual financial guidance for the year and said it was accelerating actions to reduce U.S. inventories as sales struggle.

The transatlantic automaker is forecasting an adjusted operating income margin of 5.5% to 7% for the year, down from the expected double-digit projection. Roughly two-thirds of the reduced margin is because of North America where sales were down 16% in the first half of the year. Other contributors include lower-than-expected sales in the second half of the year across most regions. It would be the first year the company doesn't post a double-digit margin since the 2021 merger between Fiat Chrysler Automobiles NV and French automaker Groupe PSA in 2021.

To address its challenges, the automaker is reducing shipments in North America by more than 200,000 vehicles in the second half of 2024 compared to 2023, up from the previously stated 100,000-vehicle guidance. It expects to have no more than 330,000 vehicles in U.S. dealer inventory by the end of 2024, instead of the previously planned first quarter of 2025. Additionally, Stellantis says it's spending on more incentives for 2024 and earlier models.

It's also making productivity changes to address cost and capacity. The company already has announced a series of job cuts at plants in Detroit, Warren, Sterling Heights and Toledo, Ohio.

The automaker has been under fire from dealers, who are upset with high-priced vehicles piling up on their lots, as well as the United Auto Workers, which is angry about layoffs and worried the company is seeking to move more vehicle production — including Jefferson's Durango SUV — out of the country. The union also is threatening to strike over the company's delay in reopening a plant in Belvidere, Illinois, which it says is violating its 2023 labor contract. The company said it's not in violation, and that a strike would be illegal.

Stellantis in a news release said deterioration in the global industry reflects a lower 2024 market forecast than at the beginning of the year.

"Competitive dynamics have intensified due to both rising industry supply, as well as increased Chinese competition," it said.

The automaker also updated its industrial free cash flow to an expected range of minus $5.6 billion (5 billion euro) to minus $11.2 billion (10 billion euro). The company before had forecasted a positive result. The decrease came from the declined margin outlook and increased working capital in the second half of 2024.

Stellantis on Monday also said dealers in Europe now are able to order the all-electric T03 city car and C10 SUV from Leapmotor International, the company's joint venture for global distribution of products from Chinese EV maker Zhejiang Leapmotor Technology Co. Ltd.

(Detroit News Staff Writer Luke Ramseth contributed.)

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