Chrysler Reports Rise in 3Q Profit From Last Year

Posted on November 3, 2004 by LCT Staff - Also by this author - About the author

DETROIT – The chief of DaimlerChrysler AG's Chrysler Group says the once-struggling American-based operation is poised to increase its share of the ultra-competitive U.S. auto market this year, but profits remain the priority.

On Oct. 28, Chrysler reported an operating profit of $269 million from its automotive business in the third quarter, up from $171 million a year ago. It marked the fifth consecutive quarterly profit for the division that lost $1 billion in the second quarter a year ago.

The key to the turnaround, analysts say, is a slew of new vehicles, led by the hot-selling, Hemi-powered Chrysler 300C. Chrysler launched the redesigned Jeep Grand Cherokee and Dodge Dakota pickup in the third quarter, bringing to nine the number of launches in 2004, the most ever for Chrysler.

For the first nine months of 2004, Chrysler was the only one of Detroit's Big Three automakers to grow its U.S. market share – 13 percent compared to 12.8 percent a year ago. Its third-quarter results helped parent DaimlerChrysler record a profit of $1.18 billion.

"I think it's pretty encouraging that we can change this trend which seems to be a given: The Big Three have to lose market share, and the Japanese have to gain," said Dieter Zetsche, Chrysler president and chief executive.

"With more new products coming, and having them out for more than a few months, I'm confident we'll see more market share gain," Zetsche said. "But once again, our No. 1 priority is to make money, and secondly we want to have growth to support that objective."

Chrysler's third-quarter results reflect earnings generated solely from its automotive business, which was aided by decreased spending on consumer incentives. DaimlerChrysler, headquartered in Stuttgart, Germany, and Auburn Hills, Mich., reportrf results for financial services separately.

Larger rivals General Motors Corp. and Ford Motor Co. both reported losses at their global automotive businesses in the July-September period, but they managed to post profits largely from earnings in their financial services arms.

The company has some vehicles on the market that are capturing buyer attentions. Sales of Chrysler’s new flagship sedan, the 300C, were up 59 percent for the first nine months of 2004, versus the vehicles they replaced – the Chrysler 300M and Concorde – over the same period last year.

Chrysler said overseas sales are up 4 percent year-to-date versus 2003.

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