Chrysler's Income Falls 65 Percent; Execs Blame It on Cost of New-Vehicle Launches
If you look at Chrysler's dealership lots, it has a bunch of new, innovative cars, trucks, and crossovers, and its lineup is getting even better with each new product launch. If you look at its balance sheets, the story is far less bright-eyed and rosy-cheeked. Chrysler has reported that its income was down from the first quarter of this year versus last year by a whopping 65 percent. Translation: It made $166 million in net income last quarter versus $473 million in the same quarter in 2012. Ouch. So what's to blame? Launching the 2013 Ram 1500 and Heavy Duty trucks, and the 2014 Jeep Grand Cherokee, says CEO Sergio Marchionne."We remain on track to achieve our business targets, even as the first-quarter results were affected by an aggressive product launch schedule," says Marchionne in a statement. "This quarter underscores the importance of an unwavering commitment to execute flawless vehicle introductions to reach our full potential. While the task ahead this year is daunting, we remain committed to our overall targets, including a minimum shipment increase of 8 percent and a Modified Operating Profit of $3.8 billion." Chrysler says net revenue was down from $16.4 billion to $15.4 billion, largely because of the loss of 31,ooo Jeep Liberty shipments since the model's discontinuation. It is being replaced with the 2014 Jeep Cherokee that debuted at the 2013 New York Auto Show. Worldwide shipments for the first quarter were down from 607,000 to 574,000. Unlike many of its rivals, Chrysler can't afford to have a flop, much less even a stumble. Having come out of bankruptcy just four years ago, the automaker has been both a success story for the American automaker and a crutch for parent company Fiat as it battles a harsh economic climate in Europe. Chrysler says the huge drop in income is a one-time deal. We hope so. Source: Chrysler
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