DETROIT (AP) — In just three years, Chrysler has gone from government ward to rising star.
The No. 3 U.S. automaker made $1.7 billion last year thanks to big gains for its much-improved cars and trucks, and it's expecting profits to reach $2.2 billion this year.
It's a big improvement over 2011, when Chrysler earned $138 million. And it's even more remarkable considering that Chrysler was in bankruptcy and living on taxpayer loans just three years ago.
The improving U.S. economy is one reason for Chrysler's success. Auto sales in the U.S. — where Chrysler sells three out of every four of its vehicles — rose to a five-year high of 14.5 million last year. They could climb to 15.5 million or more this year, most industry analysts say.
But Chrysler rose even faster than average, with its U.S. sales up 21 percent versus 13 percent for the industry. That's because new or recently revamped products like the Dodge Dart small car, Ram pickup and Jeep Grand Cherokee are putting Chrysler back on buyers' shopping lists after years of quality concerns and flagging demand. Sales of the Chrysler 300 sedan nearly doubled in 2012; so did sales of the tiny Fiat 500.
Chrysler also made more on every car it sold. Customers paid an average of $29,630 for a Chrysler vehicle last year, up about $1,000 from the year before, according to auto pricing site TrueCar.com.
Revenue increased 20 percent to $65.8 billion last year. Chrysler expects higher revenue of between $72 billion and $75 billion this year.
Fueling the growth is a revived truck market that should see some upswing as home construction improves. The company's Ram pickup is a strong contender in that segment, says IHS automotive analyst Mike Wall. Sales could also get a boost this year from updated versions of popular products like the the Jeep Grand Cherokee, Fiat 500 and Jeep Liberty.
It helps that Chrysler has limited exposure to Europe, where falling sales have hurt its competitors, Wall says. Ford announced Tuesday that it expects to lose $2 billion in Europe this year on top of a $1.75 billion loss in that region in 2012.
But Chrysler's limited international sales are also a frustration for CEO Sergio Marchionne, who has led Chrysler and its majority owner, Italian automaker Fiat SpA, since Chrysler emerged from bankruptcy in 2009. Chrysler and Fiat recently signed a deal with Chinese automaker Guangzhou to build Jeeps for Chinese buyers, and Marchionne wants to start production quickly.
"I'm tired of waiting in China," he said in a conference call with analysts and media. "Jeep may be our way back into that market." Marchionne hopes to beat his goal of selling 500,000 Chrysler cars and trucks outside North America by 2014. But the company has a ways to go. Chrysler sold just 210,000 vehicles — mostly Jeeps — outside the U.S. last year.
Chrysler also gave an update on some future products. It confirmed that an Alfa Romeo car will come to the U.S. from Italy later this year, possibly with a Ferrari-designed engine. A new version of the Chrysler 200 midsize sedan is coming in 2014, and a long-awaited new minivan is due in 2015.
Marchionne says the minivan and other new products have been delayed by a lack of money. But Wall says Chrysler also needs to proceed carefully with the new minivan, since it's a vital product for the company.
"They've owned that segment," Wall says. "The last thing you want to do is make the wrong call and see a flight out of your dealerships." Chrysler spent $4 billion on capital expenditures last year, and it plans to hold that steady in 2013. Marchionne said the company is spending much more on product development than rivals, but needs to in order to improve its image after years of lackluster offerings.
"We are overspending. We understand this. But we're doing this with a very clear intent," he said.
He also said he wants Fiat to fully own Chrysler "as soon as I can afford it." The companies are inseparable now, he said, and share parts as well as executives.
"I don't see the future of Fiat and Chrysler as being separate, "Marchionne says. "I see them as one entity at some point in time." Fiat now owns 58.5 percent of Chrysler, with the rest owned by a health care trust for retired union workers. Fiat wants to buy the trust's shares, and the two sides have been fighting over their value in court.
Marchionne praised employees and promised an unspecified amount in bonuses in an email sent Wednesday to Chrysler's 63,643 active workers, many of whom remember the dark days when Chrysler was living on $12.5 billion in government loans. Nearly all of that money has now been repaid.
"There can be no more doubt that our comeback is real," he told workers. "Your phenomenal efforts have put us on a road with an endless horizon in front of us."
Company is now a rising star among car makers
DETROIT (AP) — In just three years, Chrysler has gone from government ward to rising star.
Health insurance numbers below projections
Only 6,847 Michiganders selected marketplace health insurance plans through the Affordable Care Act through November, less than 1 percent of the state’s population.Continued ...
Senators want check of oil pipeline beneath lakes
Three U.S. senators asked a federal agency Wednesday for evidence that a pipeline crossing a section of the Great Lakes is safe, following a roughly 10 percent increase in its capacity to carry oil.Continued ...
Do homework when buying tablet for kid
Tablet computers are expected to top many kids’ holiday lists, but parents need to do their homework first.Continued ...
Spotify launches free mobile streaming service
Music service Spotify has launched a new free streaming service for mobile devices.Continued ...
Community Foundation backs new YMCA
The new YMCA received $1.4 million from the Grand Traverse Regional Community Foundation for its recreation facility now under construction on Silver Lake Road.Continued ...
Rotary Charities distributes $593,000 in grants
Rotary Charities recently distributed $593,413 in grants, including $40,000 to help support a merger of Child and Family Services with Third Level Crisis Intervention Center.Continued ...
GM executive to be 1st woman to head major car co.
Mary Barra has spent the past three years as General Motors' product chief, making cars that drive better, last longer and look good in showrooms.Continued ...
5 things to know about GM's new CEO Mary Barra
Mary Barra is very literate in GM corporate speak. But there are times she speaks very plainly.Continued ...
- Tuesday, December 10, 2013
Feds sell last stake in GM
The U.S. government ended up losing $10.5 billion on the General Motors bailout, but it says the alternative would have been far worse.Continued ...
Business in Brief: 12/10/2013
Name released of mine worker who died; Average Michigan gas price is $3.23.Continued ...
New American Airlines CEO vows to make merger work
American Airlines and US Airways seem an unlikely couple, even to the man who took over the combined company after they completed their merger on Monday.Continued ...
- Sunday, December 8, 2013
Federal Farm Bill frustration boiling over
Frank Lipinski farmed in northern Michigan land since 1952. Lipinski, 79, watched booms and busts blow through the region. He’s survived too little rain, too much rain and saw the nation’s agricultural landscape transform from one dominated by small family farms to big agri-business.Continued ...
Two on the Town turns 30
John Rodge witnessed business competitors come and go over the last three decades.Continued ...
SCORE: Should you seek a patent?
Entrepreneurs commonly ask if they should seek a patent to help protect their business idea or invention. Patents can be an important asset for a business because they allow you to prevent others from making, using, or selling your invention.Continued ...
Business in Brief: 12/08/2013
Biz after hours; $5M offer for art.Continued ...
Business Memoranda: 12/08/2013
Fifth Third Bank welcomed three employees to the Traverse City banking team.Continued ...
Cargazing: RAV4 gets upgrade as popularity grows
During the press launch of the new RAV4 earlier this year, Toyota officials said they forecast sales of their redesigned small utility would surpass the 200,000 mark.Continued ...
- Saturday, December 7, 2013
Ag Forum: Cider pressing on the move
Geissberger Farmhouse Cider has gone mobile. This cidery in Clarington, Ontario, is keeping up with the times by providing a mobile cider pressing service to Durham region farmers and farm markets.Continued ...
Futures File: Wheat prices soften; hog market wallows
Wheat prices dropped to the lowest price in almost three months this week, grinding down on news that global wheat output may reach a record.Continued ...
- Friday, December 6, 2013
Protesters push for wage hikes
Fast-food workers and labor organizers marched, waved signs and chanted in cities across the country on Thursday in a push for higher wages.Continued ...
Building Permits: 12/06/2013
Building permits issued in Grand Traverse County:Continued ...
At 50, new-look Mustang still has plenty of muscle
Ford Motor Co. on Thursday introduced the 2015 Mustang, a confident and aggressive riff on the iconic pony car that first made Americans swoon in the 1960s.Continued ...
The Record: 12/06/2013
Assumed names filed in Grand Traverse County:Continued ...
- Thursday, December 5, 2013
In Japan, General Motors has high hopes, low sales
General Motors says it's in Japan for the long haul despite sales of Cadillac and Chevrolet models barely surpassing 1,000 vehicles a year.Continued ...
Services send mystery boxes
Sex toys. French films. Star Wars action figures. Erotic photos. What do these things have in common? They're the gifts that keep on giving — about every month.Continued ...
- Health insurance numbers below projections