Chrysler sees strong 2013 as Q4 profits surge
Chrysler predicted strong growth this year after its profits surged 68 percent in the fourth quarter thanks to booming sales in the United States, the automaker said Wednesday.
Total profits for the fourth quarter were $378 million on revenues of $17.2 billion, up from $15.1 billion in the year-earlier quarter, the third largest US automaker reported.
The quarter capped a strong year for the number three US auto maker, in which net income was up more than nine-fold to $1.67 billion on a 19.6 percent gain in revenues, to $65.8 billion.
It forecast net profit will rise to $2.2 billion in 2013 on global shipments of 2.6-2.7 million vehicles, compared to 2.4 million last year, and revenues in a range of $72 billion to $75 billion.
Chrysler, majority owned by Italy's Fiat with the company's auto union controlling a large minority share through its pension fund, has sustained a strong recovery from its near collapse and rescue by the US government in 2008.
"While we are pleased to have achieved strong financial results in 2012, the enterprise we are crafting is not complete," said Chrysler Group chairman and chief executive Sergio Marchionne.
"The goals we've set for the year ahead reflect a common desire by everyone from leadership to the shop floor to succeed and sustain the power of the house we are building."
Chrysler expects to capture a larger share of the growing US market this year and forecast its sales would rise to 1.9 million in 2013 from 1.7 million in 2012. It expects sales to rise another 100,000 units in the United States in 2014.
"I would never, ever declare war on my competitors in the United States. I just want a fair share of the market, whatever that would be," Marchionne said in a conference call.
"It's a healthy environment. Let the games go on."
It also expects to see global sales rise, especially once a recently announced plan to build Jeeps in China come to fruition.
The automaker also released a new product plan which will either drop or push back the introduction of some Chrysler and Dodge vehicles while accelerating the introduction of Alfa Romeo and Fiat models.
This is being done to ensure that Chrysler ensures each of its vehicles fit into particular niches of the market, Marchionne said.
"One of the problems with Chrysler historically is we had competing products in the showroom with different badges," he said in a conference call.
"We paid a huge price for this because it caused price differentiations and impacts on margins."
Marchionne described the introduction of Alfa Romeo to the United States market as "crucial" and said the expansion of the Fiat brand there will be done "in a very selective way."
"We've found what we consider to be a comfortable space for Fiat and we need to nurture it rather than try to make it a generalized brand," he said in the conference call.
Alfa Romeo will introduce its first vehicle this year, then bring four new models in 2015 and a fifth in 2016. Fiat will also introduce a new model this year -- the 500 L -- along with six models in 2015 and one more in 2016.
Four Chrysler and Dodge vehicles set to be released this year will be dropped and seven will be pushed back by one to three years.
Marchionne said he is focused on fully integrating Chrysler and Fiat by 2015 and said the Italian carmaker will have full ownership of its US partner "as soon as I can afford it.
"This thing is irreversible," Marchionne said, adding that the connections between both the management structure and product development are "inextricable."
"I just need to get the financial structure to coincide with what we've done from a leadership standpoint and the faster we do it the better I'll feel."
© 2013 AFP