DETROIT – Chrysler on Thursday said it earned $473 million in the first quarter, exceeding its profit for all of 2011 in just three months as its global sales rose 33 percent. þþThe profit, the largest in any quarter since the carmaker’s 2009 bankruptcy, was more than quadruple that of the same period a year ago, when it earned $116 million. Revenue increased 25 percent, to $16.4 billion. þþ“Another positive quarter – built on sales gains that have surpassed the industry average – is affirmation that the Chrysler team is maintaining its focus,” Chrysler’s chief executive, Sergio Marchionne, said in a statement. þþAfter being largely written off by many industry observers, Chrysler has steadily improved its finances by overhauling a large portion of its product lineup and using creative, high-profile advertising to attract new customers. þþIts market share in the United States jumped two percentage points in the first quarter, to 11.2 percent. In Canada, Chrysler surged ahead of General Motors and the Ford Motor Company to become that country’s top-selling carmaker for the first time. þþThe company said it was on track to achieve previously announced full-year targets of about $1.5 billion in net income and $65 billion in revenue. The goals compare to 2011 net income of $183 million and revenue of $55 billion. It said free cash flow in the first quarter was $1.7 billion, which is already more than its target for all of 2012. þþ(The Treasury Department has recovered $11.2 billion of the $12.5 billion it lent to Chrysler in 2008 and 2009 and expects to write off the remaining debt, which belongs to the portion of Chrysler that remained in bankruptcy after the new company emerged.) þþChrysler’s improved performance has occurred at the same time that its Italian partner and majority shareholder, Fiat, is struggling in Europe’s troubled economy. It was the fastest-growing full-line automaker in the United States in 2011 and stands to benefit more as sales continue growing across the industry this year. þþChrysler is making a play for a larger share of the market this year with the introduction of its new compact car, the Dodge Dart. It is adding 1,800 jobs in Belvidere, Ill., to build the Dart, which analysts say will make Chrysler competitive for the first time in many years in what is now one of the industry’s most important segments. Officials also have announced plans for 1,100 more jobs at a sport-utility vehicle plant in Detroit. þþ“We continue to deliver on the targets in our five-year plan and are now focused on launching the Dodge Dart, a car that is a true melding of Chrysler’s and Fiat’s engineering and styling strengths,” Mr. Marchionne said. þþThe average price that buyers are paying for Chrysler cars and trucks increased nearly $1,300, or 5 percent, in the first quarter from a year ago, according to the automotive research firm TrueCar.com. Inventory figures also show that Chrysler vehicles have been spending fewer days on dealer lots before finding a buyer. þþ“Chrysler gained two full percentage points of U.S. market share compared to a year ago, while increasing their transaction prices and lowering inventory turn times significantly – all resulting in a much improved bottom line,” Jesse Toprak, TrueCar’s vice president of industry trends and insights, said. “Although the year-over-year comparisons are favorable for the company, they should still get full credit for having the most desirable line up of vehicles that they have ever had in their showrooms.” þþAfter posting a loss in the second quarter of 2011, Chrysler has been profitable in all three subsequent periods. A fourth consecutive profit in the second quarter would result in bonus payments of $1,750 to hourly workers under the contract that Chrysler signed with the United Automobile Workers union last fall. þþOn Wednesday, Chrysler said it would allow its financing partnership with the lender Ally Financial to expire in 2013. Chrysler is negotiating with other lenders and could re-establish an in-house captive financing arm to make it easier for buyers to obtain financing. Its former lending division, Chrysler Financial, shut down after the carmaker’s bankruptcy, and Chrysler began a relationship with Ally, which also finances vehicles for many General Motors customers. þ
Source: NY Times
