Chrysler reported first quarter profit down 65% due to new vehicle launches.
“We remain on track to achieve our business targets, even as the first-quarter results were affected by an aggressive product launch schedule,” said Sergio Marchionne, chief executive officer of Chrysler as well as of its parent, Fiat SpA.
Chrysler’s net income for the first quarter dropped to $166 million, compared with $473 million during the same period last year, and net revenue also fell 6% to $15.4 billion. The US automaker said it sees net revenue this year to be between $72 billion to $75 billion, due to an expected strong second half. Chrysler also predicts free cash flow surpassing $1 billion.
At the beginning of this year Marchionne warned that Chrysler’s earnings for Q1 will be lower compared with 2012 due to the money spent to launch new products and the production stop of the Jeep Liberty SUV. Marchionne said this month that there is a 50% chance for Fiat and Chrysler to merge by June 2014 and create the 7th largest automaker.
Chrysler said that it plans to increase shipments during second quarter by at least 13%, which means at least 650,000 units from 574,000 units during the first quarter. From the vehicles the automaker shipped during the first three month of the year 73% were made in the US, an increase from 69% in 2012.