Chrysler Group LLC, the U.S. automaker majority owned by Fiat SpA (F), reported a third-quarter net income of $212 million and boosted its forecast for profit this year. The profit compares with a net loss of $84 million during the same July through September period last year, the Auburn Hills, Michigan-based automaker said today in a statement. The average estimate of three analysts surveyed by Bloomberg was for net income of $211 million.
Chrysler raised the forecast for its first annual profit to about $600 million from its previous guidance for this year of $200 million to $500 million, excluding costs associated with paying back U.S. and Canadian government loans. A lineup of redesigned or refreshed vehicles, including the Jeep Grand Cherokee sport-utility vehicle, Chrysler 300 sedan and Dodge Journey SUV, are helping drive the automaker’s growth.
“This house continues to be fully focused on financial performance and making outstanding cars and trucks by fully leveraging its alliance with Fiat,”Sergio Marchionne, chief executive officer of both automakers, said in the statement.
The majority of Chrysler’s revenue comes from U.S. sales, which rose 26 percent during the third quarter compared with the same period last year, according to researcher Autodata Corp. Industry sales rose 5 percent during the third quarter. For the year so far, Chrysler’s U.S. sales increased 23 percent to 1 million through September, increasing the automaker’s market share by 1.1 percentage points to 10.6 percent, according to Autodata.
Market-Share Gains
“Their share performance in the third quarter of 2011 was out of the box,” Warren Browne, vice president of business development at AutomotiveCompass LLC, said in an e-mail. “Their Achilles heel: Developing a much more credible position in the passenger-car business. The next generation with Fiat should help this.”
Marchionne pulled back on customer discounts by reducing incentive spending 6.4 percent to $3,434 on average per vehicle, according to Autodata. The industry average was $2,618 during the third quarter.
Chrysler’s ability to sell more cars with less money spent on incentives is “a dream scenario for any automaker,” said Jesse Toprak, an industry analyst with TrueCar.com, a website the tracks automotive sales.
“Chrysler now has a better understanding of matching true consumer demand with their supply, which also can be seen from the improvement in their sales while lowering their incentives.”
