(Bloomberg) -- Stellantis NV's (STLA) push to lower costs and improve its lineup is helping to drive initial signs of recovery for the struggling carmaker.

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Adjusted operating income rose to €256 million ($285 million) in the third quarter and Chief Executive Officer Antonio Filosa said Wednesday his plan to reap more savings and stamp out quality issues was on track.

The Fiat maker stuck to its guidance for the year, even as intensifying competition undermined prices in Europe. Stellantis reported an adjusted operating income margin of 0.7% for the third quarter, and expects this to rise into the "low single" digits this year.

The shares were up 3.8% at 9:58 a.m. in Milan. The stock is still down about 60% this year.

"The key question remains how" Stellantis will improve profitability in North America and Europe, Citi analyst Harald Hendrikse wrote in a note. "We don't believe that product will be enough."

Europe's second-biggest carmaker is trying to emerge from a tumultuous period that saw its business deteriorate. Earlier this year, the company announced a record writedown and resized its electric vehicle strategy, as well as plans to tackle persistent quality issues.

Filosa is pairing the measures with some €60 billion in spending through 2030 to roll out dozens of new models, prioritizing the Jeep, Ram, Peugeot and Fiat brands.

The task is particularly urgent in Europe where its range of mass-market brands including Peugeot and Opel face Chinese manufacturers like BYD Co. as well as Volkswagen AG and Renault SA. In that region, Stellantis recorded a €311 million adjusted operating loss because of lower prices and buyers turning to electric vehicles that are less profitable.

In the all-important North America region, earnings turned positive to €64 million following the introduction of new models like the Jeep Cherokee hybrid and Ram 1500 Hemi. Shipments during the quarter were held back by planned production shutdowns, Stellantis said.

US dealer inventory reached 368,000 units at end September, representing 84 days of supply. That's down from 92 days of supply in June, Stellantis said in slides posted on its website. It's expected to be in the range of 320,000 units to 350,000 units at the end of the year, the company said.