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Chrysler Group Trims Loss to $172 Million in Q2

Italian-controlled company once again promises 2010 breakeven or better numbers. IPO still coming in 2011.

by on Aug.09, 2010

Chrysler CEO Sergio Marchionne, center, UAW President Bob King, right, and UAW Vice President General Holiefield, left, applaud U.S. President Barack Obama during a visit on July 30, 2010.

Chrysler Group LLC today said that Q2 net revenues increased to $10.5 billion, an 8.2% improvement over the prior quarter. First half 2010 net revenues totaled $20.2 billion.

As a result the company ended Q2 2010 with an operating profit of $183 million and a first half 2010 operating profit of $326 million.

However, Q2 resulted in a net loss of $172 million, down slightly from a loss of $197 million in Q1.

Analysts had projected an operating profit of $400 million. And achieving profitability is crucial to plans to taking the company public some time in 2011.

In the 14 months since Chrysler emerged from bankruptcy it has only had one major product launch, the Jeep Grand Cherokee, which just went into production at the end of May. The changeover cost the company $64 million in revenue, not including tooling and other plant costs. Moreover Chrysler is carrying enormous interest costs from outstanding taxpayer loans. Payments of $296 million in Q2 accounted for nearly all of the swing between the operating profit and the net loss.

Chrysler marketshare remained at 9.4% in the United States and down slightly to 12.9% in Canada, its two primary markets as it has almost no presence overseas.

Sergio Marchionne, Chief Executive Officer, Chrysler Group said, “an extraordinary amount of work still lies ahead,”


Chrysler Group Loses $3.8 billion in 2009

However, company claims Q1 profit based on lower costs.

by on Apr.21, 2010

Chrysler is struggling with weaning itself off profit sapping incentives while it attempts to peddle an aging product line.

Taxpayer owners in Canada and the U.S. of Chrysler Group received mixed news this morning as the reorganized company posted an operating profit of $143 million during the first three months of 2010, but also posted a large loss for 2009.

Chrysler, managed by 20%-owner Fiat SpA, attributed the positive development to reduced  costs, as well as revenue from the newly introduced Ram heavy-duty pickup truck.

Revenue rose to $9.7 billion in the first quarter, plus 2.7% from the final three months of 2009, Chrysler said in a statement.

Chrysler reported a net loss of $197 million in the first quarter, compared to a net loss of $2.69 billion in the final three months of last year.

“This positive operating result in the first quarter is a concrete indication to our customers, dealers and suppliers that the 2010 targets we have set for ourselves are achievable,” said Sergio Marchionne, Chief Executive, Officer, Chrysler Group LLC, who also has his hands full as head of loss making  Fiat. (€21 million loss vs. €411 million loss for Q1 2009.)

Chrysler said it lost $3.8 billion on revenue of $17.7 billion after its emergence from bankruptcy last June 10 and through the end of 2009. This staggering  number includes $1.4 billion in so-called goodwill, which is posted on the positive side of the ledger, one of those intangible calls by accountants.

It was during the reorganization that Fiat was granted its 20% ownership for a paltry $320 million assigned to its intellectual property in a controversial transaction that saw $15 billion in government support. As a result, Canadian taxpayers now own 2.46% of Chrysler Group. U.S. taxpayers hold 9.85%.

Fiat has the option to increase its stake contingent on government loads being repaid and the  introduction of small car technology, among other terms.

Sales remain problematic at the still struggling automaker

Worldwide vehicle shipments in Q1 were 380,000, which included U.S. vehicle shipments of 268,000, both figures representing an increase of 3% versus Q4 2009. Chrysler Group vehicle sales in the U.S. dropped 5.3% even  though industry sale rose 16% during the first quarter. Market share improved to 9.1% from 8.1% Q4 2009, and to 13.7% Canada from 11.6% percent in Q4 2009.


Chrysler Group Sales Decline 8% in January

Mildly positive trend predicted - share is expected to increase?

by on Feb.02, 2010

The best seller in the company, and that's part of the problem, over reliance on trucks.

Chrysler Group reported total U.S. sales for January of 57,143 units, a decrease of 8% when compared with the same period last year when it sold 62,157 units.

Inventory at 172,803 vehicles, is down 52% compared with January 2009 when the insolvent company had 359,980 units on hand. Chrysler says that at current selling rates, this represents a 73-day supply, which is roughly inline with usual industry practices.

Last year, the insolvent company forced vehicles on dealers in a desperate and ultimately failed attempt to stay afloat.

Overall, industry figures for January are projected to come in at an estimated 10.9 million units for the Seasonally Adjusted Annual Selling Rate, which was heavily boosted in early returns by fleet sales in the 25% to 30% range of total sales at Ford Motor Company and General Motors Company.

Chrysler does not break out fleet sales on a monthly basis, but a spokesperson told that fleet was “inline with industry trends” for January. For the 2010 calendar year, Chrysler says that it wants to maintain fleet sales at about 25% of total.

Chrysler is currently offering owners of Toyota Tundra, Tacoma and Sienna vehicles  an additional $1,000 trade-in cash bonus with the purchase or lease of any new Chrysler, Jeep, Dodge car or Ram truck. In addition, $1,000 “bonus cash” is available to all Toyota returning lessees who purchase or lease a new Chrysler, Jeep, Dodge car or Ram truck vehicle.

The company is also continuing  “Zero Percent Financing” for most 2010 model-year vehicles. The  “Invest in America” partnership with more than 90 million credit union members in the United States offers a member-preferred pricing program on all 2010 model year vehicles.

In January, ten Chrysler, Jeep and Dodge vehicles posted year-over-year sales gains, including Chrysler Sebring and Town & Country; Jeep Compass; Dodge Avenger, Journey and Caravan. The company is predicting a share increase when  final numbers are in.

However, all of the Ram trucks posted big declines. It might be too soon to say things have turned around.  Chart follows.   (more…)

New Chrysler Coming Out Party Set for November

Marchionne will outline the business plan almost one year after Global Recession and the collapse that led to bankruptcy.

by on Oct.21, 2009

Chrysler is facing some difficult years.

Chrysler is facing some difficult years.

Chrysler Group LLC and its new masters from Fiat are now planning to present a new “five-year” plan during the first week in November, according to a note circulated by the automaker. The date picked for outlining Fiat’s plans comes about one-year after the company faced up to the deep financial crisis that eventually forced it into the bankruptcy.

Despite a drastic restructuring over the past year, Chrysler’s margin for financial maneuver remains slender at best, since it got far less from the U.S. Treasury than General Motors. Moreover, the current numbers are daunting — Chrysler will build fewer than 900,000 vehicles this year, even that’s a stretch, and its market share continues to tumble. Known forever as the “Number Three” Automaker behind Ford and GM, Chrysler has now been lapped by Toyota, and Honda and Nissan are closing in fast.

“Chrysler is facing a very difficult couple of years,” said one analyst. “They just don’t have any product,” he said.


Marchionne on Chrysler Group Status

CEO dismisses share concerns; says wait until November.

by on Oct.02, 2009


"September is not an indication of future performance. I’m not apologizing for it ...

Sergio Marchionne, the Chief Executive Officer of both Chrysler Group LLC and Fiat S.p.A posted an explanation of Chrysler’s status yesterday on a Chrysler blog site.

Marchionne was not made available to reporters, and Chrysler has suspended its long-standing sales result press conferences. The privately held company, in which U.S. and Canadian taxpayers hold a ten percent stake, also does not publish financial results.

In the Chrysler bailout, the U.S. Treasury has invested a combined $14.3 billion in the new and old entities, including $1.5 billion for Chrysler Financial and $280 million for the Chrysler warranty program.

Chrysler Group reported yesterday that total U.S. sales in September were 62,197 units, a decrease of 42% compared with September 2008.

Marchionne: “On the issue of Chrysler I think that one of the things you need to be absolutely careful about is that when you start looking at market share data, for any of the automotive producers in the U.S., there are a number of things that have impacted on market share, volumes in the month of September. We have just come off a substantial inducement to consumption that was associated with the Cash for Clunkers program, and that in and by itself is a disturbance that, at least from Chrysler’s standpoint, one, was unexpected and was announced at a time in which our industrial machine was just about ready to get started up and running. Effectively, most of our plants had been out for a substantial part of the spring and part of the summer; and the machines had not come back on until the end of July.

“Secondly, this is a process that we’re going through, and we have been through this on the Fiat side. When I arrived in 2004 we had to go through the same type of painful process of watching market share decline as we cleaned up our commercial practices in the field. And so a lot of the inducements that were being offered in the marketplace by American car manufacturers are beginning to disappear.


We Share!

(Chrysler was averaging incentives of about $5,500 a vehicle in the months preceding its bankruptcy this spring -KZ)


Chrysler Group September 2009 Sales Drop 42%

Fiat-controlled company predicts "challenging" balance of year.

by on Oct.01, 2009


Now "special lease rates" on the Grand Caravan.

Chrysler Group LLC reported total U.S. sales of 62,197 units, a decrease of 42% compared with September 2008. The company finished the month with 138,456 units in inventory, representing a 56-day supply. Inventory is down 64% versus September 2008 when it totaled 381,365 units.

Overall industry sales figures for September are projected to come in at an estimated 9.4 million SAAR because of the payback from the CARS, aka Clunkers program that expired last month and clearly pulled ahead sales.

“While we had some bright spots in September, it was still a challenging sales environment for the industry,” said Peter Fong, President and Chief Executive Officer–Chrysler Brand and Lead Executive for the Sales Organization, Chrysler Group LLC.

“Low inventories of popular models at the start of the month hampered Chrysler, Jeep and Dodge sales, however, the company responded with increased production. The company finished the month with increased market share compared with August 2009,” Fong said.

In October, Chrysler, Jeep and Dodge dealers continue to offer “competitive” lease rates on all 2010 model year vehicles.

“Consumers are responding to Chrysler Group’s return to leasing, appreciating the flexibility this financing option gives them,” said Steven Beahm, Vice President–Sales Organization, Chrysler Group LLC. “

Featured vehicles with special lease rates through Nov. 2, 2009 are:
• Chrysler Town & Country
• Dodge Grand Caravan, Nitro and Journey
• Jeep Liberty

2010 Model Year Chrysler Vehicles:
Beginning today, the Chrysler brand offers consumers a variety of financing options. On select 2010 models, consumers can choose zero percent financing for up to 36 months through GMAC Financial Services plus consumer cash of up to $1,000, or they can choose consumer cash of up to $2,000. “Attractive” financing rates also are available through GMAC Financial Services on all 2010 model year Chrysler vehicles.

2010 Model Year Dodge Vehicles:
On select 2010 model Dodge vehicles, consumer cash of up to $2,000 or “attractive” financing rates through GMAC Financial Services on all 2010 model Dodge vehicles are available effective today.

2010 Model Year Jeep Vehicles:
Beginning today, the Jeep brand is offering consumers a variety of financing options on select 2010 model year Jeep vehicles. Options include zero percent financing for up to 36 months through GMAC Financial Services plus consumer cash of up to $1,000, or consumer cash of up to $3,000. “Attractive” financing rates through GMAC Financial Services also are available on all 2010 model year Jeep vehicles.

Current Jeep vehicle owners also are eligible for $1,000 Owner Loyalty Bonus Cash available to use toward the purchase or lease of select 2009 and 2010 model year vehicles.

2009 Model Year Vehicles:
Chrysler Group is offering zero percent financing for up to 72 months through GMAC Financial Services or up to $4,500 consumer cash on select 2009 model year Chrysler, Jeep and Dodge vehicles.

The above incentives are valid October 1 through November 2, 2009.