Recently Moody’s Investors Service upgraded Chrysler ‘s rating from B1 to B2.
Moody’s seems confident that Chrysler will manage to continue its turnaround, and increased its rating on about $8 billion of the automaker’s debt from B1 to B2, but still four levels below the investment grade. Last month Chrysler reported sales up 16.4%, its best January since 2008 and the 34th consecutive month of gains.
Moody’s expects “Chrysler will be able to sustain the progress it has made during the past 18 months in strengthening its competitive position in North America.”
This week Chrysler announced it has earned $1.7 billion in 2012, eight times more compared with the $183 million gained in 2011. The company expects to earn $2.2 billion this year. Although Chrysler was the critics’ target for selling almost all its vehicles in North America, the fact that it avoided the loss making European market is what helped the automaker boost its earnings.
“Notwithstanding this progress, Chrysler continues to face a number of challenges. Although improving, the competitiveness of its portfolio lags that of peers in terms of profitability, age, and consumer appeal under third-party vehicle quality rankings,” Moody’s said.