Strong sales across the Ram and Jeep product lines in the U.S. helped boost second-quarter sales for Chrysler Group LLC, Bloomberg News reported.
However, spending associated with product launches and weak sales for its European brands compelled the company to cuts its full-year forecast, Bloomberg said.
Chrysler’s 2Q net income rose to $507 million from $436 million a year earlier, while net revenue increased 7.1% to $18 billion, Bloomberg said. Chrysler’s U.S. deliveries gained 8.9% in the first half of the year to 908,332 cars and light trucks, helped by a 23% gain for the Ram division and a 7.6% increase for the Jeep Grand Cherokee, Bloomberg said.
Overall vehicle sales 10%, to 643,000 units versus 582,000 a year ago, and were driven largely by a 17% gain in the company’s U.S. retail sales, Chrysler said. Weakness in the company’s European operations dragged down the overall results, as did spending associated with upcoming product launches, Bloomberg said. Among those launches is the upcoming release of the new Jeep Cherokee.
Due in part to these factors, Chrysler reduced some of its full-year guidance. Chrysler now forecasts operating profit of $3.3 billion to $3.8 billion, compared with a previous target of about $3.8 billion. It now expects net income of between $1.7 billion and $2.2 billion, down from an earlier expectation of about $2.2 billion. And the company now predicts vehicle deliveries of about 2.6 million vehicles, compared with a range of 2.6 million to 2.7 million.
“The timing of product launches and capacity increases causes this year’s performance to be biased to the second half,” Chrysler and Fiat CEO Sergio Marchionne said in a statement. “A continued aggressive drive for excellence and flawless execution will be essential to attain the targets we’ve set for ourselves.”
Marchionne wants to buy the 41.5% of Chrysler Fiat doesn’t own and forge a global manufacturer able to challenge General Motors Co. and Volkswagen AG. Fiat, which is based in Italy, rescued Chrysler through a government-brokered alliance in 2009. Marchionne obtained control of Chrysler without paying cash by pledging Fiat’s vehicles, technology and managerial expertise to the company.
Since then, Chrysler has emerged as the financial power of the Fiat-Chrysler alliance. Without Chrysler, Fiat would have reported a loss for 2012, Bloomberg said.