DETROIT/MILAN: Carmaker Fiat’s first quarter profit slumped more than expected as its US unit Chrysler’s sales suffered from the phase out of the Jeep Liberty pending a new model launch.
“We knew we would be limping in the quarter. I just didn’t think I was going to limp that much,” said Sergio Marchionne, chief executive of both Chrysler and its parent Fiat, on a conference call.
Marchionne in January warned that Chrysler’s first-quarter earnings would be down from a year earlier because of the expense of product launches and the fact that the Jeep Liberty SUV was no longer being produced.
The Liberty’s successor, the Jeep Cherokee, was not sold in the first quarter and will not be sold until the third quarter. But Marchionne said that there were delays in the production launches of the Jeep Grand Cherokee and RAM heavy duty trucks, which he said are among the highest profit-makers for the carmaker.
Fiat, which took control of the third-largest US automaker when Chrysler emerged from a government-sponsored bankruptcy four years ago, stood by its financial forecasts for 2013 despite a worsening European car market and lower revenue in the US for the first quarter. Fiat said it sees full-year revenue in the ¤88bn to ¤92bn range .
At Chrysler, first-quarter net income fell 65 percent to $166m from $473m a year earlier. Net revenue slipped 6 percent to $15.4bn. On the conference call, Marchionne introduced Richard Palmer, Chrysler’s chief financial officer, by saying Palmer would give the “not so glorious details of a not so glorious quarter.”
Chrysler said it will increase vehicle shipments in the second quarter by at least 13 percent from the first quarter, to 650,000 vehicles up from 574,000 in the first quarter. Of the vehicles the company shipped in the first quarter, 73 percent went to the US market, up from 69 percent a year earlier.
Marchionne said the Jeep Grand Cherokee will show strong April sales, and that the biggest boost in Grand Cherokee sales will show in the third quarter. Reuters
