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Chrysler Group LLC Posts 2Q Operating Profit

9 August 2010

Chrysler Group LLC posted a second quarter operating profit of $183 million, and a first half 2010 operating profit of $326 million.

In Q2 2010, Net Revenues increased to $10,478 million representing an 8.2% improvement over the prior quarter. First half 2010 Net Revenues totaled $20,165 million.

The Q2 2010 Operating Profit improvement of $40 million, compared to Q1 2010, was driven primarily by continued volume increases, the company said. This improvement was partially offset by the impact of the Jeep Grand Cherokee changeover and moderate increases in incentive programs. Industrial costs increased due primarily to the ramp-up of ER&D expenses for the new product offensive starting in the second half of the year, partially offset by continued manufacturing efficiencies.

Worldwide vehicle sales were 407,000 units for Q2 2010, an increase of 22% compared to 334,000 units in Q1 2010, with all brands posting gains. US market share improved to 9.4% in Q2 2010 from 9.1% in Q1 2010. In addition, Canadian market share was a strong 12.9% as a result of sales increasing 32% versus Q1 2010.

Although it is holding to its earlier targeted financial metrics for the year, Chrysler said that it might upgrade its guidance for 2010 when announcing Q3 results.

Highlights of US Sales for July included:

  • Jeep Brand sales (26,466 units) up 19% by volume year-on-year
  • Jeep Grand Cherokee sales (5,407 units) up 54%
  • Jeep Wrangler sales (10,043 units) up 121%
  • Jeep Liberty sales (4,893 units) up 70%
  • Dodge Challenger sales (3,695 units) up 317%
  • Dodge Charger sales (6,023 units) up 126%
  • Dodge Journey sales (4610 units) up 11%
  • Dodge Nitro sales (2,186 units) up 96%
  • Chrysler Town & Country minivan sales (8,083 units) up 18%
  • Ram pickup truck sales (20,138 units) up 14%
  • Ram Heavy Duty pickup truck sales up 89%
  • Dodge Dakota sales (1,088 units) up 49%
  • Overall, car sales were down 2%, while truck sales were up 7%

August 9, 2010 in Brief | Permalink | Comments (11) | TrackBack (0)

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Comments

Not bad, specially for a company producing many gas guzzlers. Are Americans and Canadians going back to large vehicles doing under 20 mpg?
Our learning curve is very slow.

Actually... Crysler's biggest area of growth is Europe. Apparently Jeeps are popular over there. I still think people should be able to buy what they want to buy (higher gas prices would lead to a faster switch to alternatives globally), so I have no problem with it.

Their mileage will improve as the FIAT power trains are incorporated in the next few model years. Today, at least they are showing signs of life with the models they have. It is possible that their improved company viability is the largest reason they are selling better this year than last. FIAT may be helping them sell better in Europe, too.

They don't have a Focus nor Cruze equivalent. They used to have Neon, which was just a cheap car. If the Fiat/Chrysler group wants to compete, they need a Corolla/Civic class vehicle. Something people are drawn to for its merits.

I like the Liberty and Journey, but they can forget the Nitro and Challenger. They will have to eliminate the models that don't sell well and start building models that do. When you have limited resources you have to get real.

Minivans are what brought them back long ago. A hybrid minivan would be a first, just remember to put four wheel disk brakes on them and make them handle better. A good sport hybrid minivan could put them back on the map again.

SJC- agreed.

I've wondered why hybrids haven't been incorporated into larger vehicles (outside of the escape and silverado). They're already more expensive, so the cost of the battery would equal a smaller % of the total cost. Additionally, the savings in fuel costs would be much greater in vehicles where the base model gets less than 20 mpg.

If a minivan gets 12 mpg around town with stop and go driving, then you are in SUV territory and that has a more macho outdoor image. Some people go for that image and for some image is everything.

There seems to be plenty of room for batteries in a minivan and they can handle the extra weight. If the minivan is the people mover of suburbia, might as well make it fuel efficient. Throw in some good handling and styling and they just might beat the competition to it.

SJC Bryan: I agree too. You'd think something cute, little, hip, different & most importantly cheap (but not cheap looking), marketed with a bunch of trendy youngsters, would be profitable.

Another thing car companies have done is recognized certain aftermarket trends and then built those features into their vehicles as standard equipment. For example - car stereos. Factory installed car stereos used to be horrible, then I think the car companies realized they were losing a lot of money to the aftermarket guys and started including much better stereos in their cars. Another example is with limited edition regional vehicles like "Texas Edition" Chevy Silverados.

What are trends that carmakers haven't expoited yet? How about "Urban Edition" vehicles - gold spinner rims, emblems, and wiper blades, marketed by R & B and Hip hop stars? I'm surpised no one has truly jumped on the urban theme yet.

In a way they have, the Scion line up allows customization before delivery. One of those with a hybrid option is not offered. I guess that is not cool enough.

Chrysler, like many other USA firms, may have learnt to do more with less employees. USA is in the process of learning to do more with 8M less employees. That may be the way to become more competitive.

What shall be done with the 8+ million unemployed?

The economy will have to expand at a rapid rate to make a difference.

Soldiers coming back from oil wars will make it worse.

Huge national green energy + infrastructures ($2000+ B) programs may be required to turn the tide.

We turned sand into computer chips in the 70s,80s and 90s. A market that not exist was created. PCs may have been a substitute for typewriters, but they really added to the GDP and productivity. Renewable energy can to the same thing, but computer chip companies had typewriter companies to compete with, renewable energy has coal and oil.

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