Chrysler Heads Towards $3 Billion in Profits image

Chrysler reported sales up 23% in North America in the first half of 2012, to 1.23 million cars and trucks.

If Chrysler continues to reach increased sales it will exceed 2.4 million units by the end of this year and maybe an operating profit of $3 billion. From January to June Chrysler manufactured 928,748 trucks, SUVs and minivans and 298,472 cars. The company plans to expand its portfolio in the second half of the year by ramping up production of the Dodge Dart in Belvidere, Ill. Chrysler began production of Dart in May 2012 and until now it has produced 5,401 Dodge Darts.

As a general rule, a car maker’s profit should increase if production increases, if the company doesn’t produce more cars than consumers are buying. Excess production and implicitly larger rebates lead to a decrease in profits. Since Chrysler’s sales have been rising, the company added new shifts, boosted production at several plants, cut the traditional two-week break to one week at two facilities and skipped the two-week holiday at four other facilities in North America.

“The objective of $3 billion is close at hand. We could overshoot it,” said Chrysler and Fiat CEO Sergio Marchionne.