March 29, 2024

Chrysler Posts a Loss, but Sales Improve

The company, which is majority owned by the Italian automaker Fiat, reported a loss for the quarter of $370 million, mostly because of a $551 million one-time charge to repay loans from the United States and Canadian governments.

Without the charge, Chrysler said it would have posted net income of $181 million. A year ago, the company lost $172 million. In the first quarter, it made $116 million.

The automaker also reported a 30 percent increase in revenue to $13.7 billion, compared to $10.5 billion in the same period a year earlier.

The stronger demand for its cars and trucks was an indication that its comeback from bankruptcy in 2009 was accelerating, said Sergio Marchionne, Chrysler’s chief executive.

“We recognize the distance we have to travel,” Mr. Marchionne said in a conference call with analysts and reporters. “The focus now is on rebuilding a great car company.”

Chrysler, the smallest of the three Detroit car companies, said that new products including the Jeep Grand Cherokee helped it increase its share of the American market to 10.6 percent, up from 9.4 percent in the second quarter of last year. Chrysler’s global sales increased 19 percent over all from the year-earlier period.

“There is no doubt that Chrysler group has taken a huge step forward this quarter,” said Mr. Marchionne, who is also chief executive of Fiat, which owns 53 percent of the Detroit automaker.

Mr. Marchionne said that Chrysler’s resurgence should gain momentum now that it had retired its government loans. The company has paid back its entire $7.6 billion in government loans.

“Refinancing our debt and repaying our government loans six years early reinforces our conviction that we are on the right path to rebuilding this company and restoring it to its rightful place in the global automotive landscape,” Mr. Marchionne said.

Chrysler is on track, Mr. Marchionne said, to achieve full-year revenue of $55 billion and earnings of $200 million to $500 million, excluding charges.

The earnings were the first reported by the company since Fiat took a majority ownership stake last week by purchasing stock previously held by the American and Canadian governments.

Chrysler and Fiat will consolidate their financial results and further meld their management teams.

Mr. Marchionne is expected to appoint senior executives soon to oversee engineering, purchasing and other areas for both automakers, as well as regional chiefs for the combined companies.

He declined to comment on specific appointments or whether he would continue to serve as chief executive as Chrysler. But the new structure, he said, would be intended to take advantage of the scale and resources of both companies.

“What is important for us is that we start acting as a team that manages the business on a global scale,” he said.

Industry analysts said it was too soon to assess the prospects for an integrated Fiat-Chrysler organization. “But Chrysler has been making a remarkable recovery over the last several months and is proving to be an important and valuable asset for Fiat,” said Michelle Krebs, a senior analyst at the automotive-research Web site, Edmunds.com.

Article source: http://feeds.nytimes.com/click.phdo?i=08eb2242694b2bb00c10cbaae69d9a6e