Chrysler reports US$116 million profit for Q1

Chrysler announced a net profit of US$116 million in the first quarter, up from a loss of US$197 million in the first quarter of 2010.  With this latest result, all three major U.S. automakers Chrysler, GM and Ford have managed to make a comeback in the first quarter. Revenues for Chrysler rose to US$13.1 billion, an increase of 35% based on sales of 394,000 new cars and trucks.  Chrysler is currently partnered with Fiat SpA and is still paying back loans to the U.S. and Canadian governments, which affected profit margins significantly.  To address that, the company is looking to raise financing from a group of banks so as to to lower interest costs.  Sergio Marchionne, chief executive of both Chrysler and Fiat, said that while the company is on the right track, there will be a loss of between 50,000 and 100,000 in new vehicle production this year because of parts disruption due to the Japanese earthquake.  However, Marchionne said that the company is ready to step up production to meet any shortage in availability of Japanese vehicles.  He said, “It’s fair to say there will be some opportunity, we are ready to ramp up production and we have made plans with the supply chain to deal with this.”  Marchionne also indicated that the company is moving toward making Chrysler vehicles more fuel efficient in light of increasing gasoline prices.  He states, “Between 2010 and 2014 we expect a roughly 25% improvement in fuel economy across the fleet in Chrysler. Much of that will come from the use of four-cylinder engines.” (May 2, 2011)