Chrysler profit at 13-year high
Car maker Chrysler has posted its best quarterly profit in 13 years - not bad for a company that almost died three years ago.
The firm earned 473 million US dollars (£293 million) in the first quarter, mainly from strong US sales, which rose 39% between January and March. Customers snapped up Ram pick-ups, Jeep Grand Cherokee SUVs and Chrysler 200 saloons.
The profit was more than four times what Chrysler made a year earlier. And it was the best performance since the third quarter of 1998 when Chrysler earned 682 million dollars (£422.6 million) during the pick-up truck and SUV boom.
"I have no bad news to tell you." Chrysler chief executive Sergio Marchionne said, adding that trends for the rest of year look positive.
Another reason Chrysler made so much money is because it is generating more cash every time it sells a car or truck. It is getting an average of 29,234 dollars (£18,116) per vehicle in the US, up almost 5% over last year, according to the TrueCar.com auto pricing website.
When sales and prices both rise, that generates more revenue and profit. Revenue for the quarter rose 25% to 16.4 billion dollars (£10.2 billion).
It is a marked change from 2009. The recession, which devastated vehicle sales, took the company to the brink of financial ruin. Chrysler and its financing arm needed 12.5 billion dollars (£7.7 billion) from US taxpayers to survive. When a government auto task-force became deadlocked over whether to save the collapsing company, the tie was broken by President Barack Obama.
Then things turned around. Chrysler got the bailout, cut costs in bankruptcy and saw sales improve along with the economy. The company went into overdrive to revamp 16 models, making them more appealing to car buyers. The results have paid off. Sales have increased steadily through 2011 and into 2012.
Chrysler is optimistic about the coming year, repeating a forecast that it would make 1.5 billion dollars (£929.5 million) in 2012. Total car and truck sales in the US are running at an annual rate of 14 million so far. That would be a healthy increase over last year's 12.8 million.
Chrysler was a big contributor to the earnings of its majority owner, Italian car giant Fiat. Fiat's first-quarter profits more than tripled to 137 million dollars (£84.9 million) due largely to Chrysler. Excluding Chrysler, Fiat's revenues fell 5.7% due to declining European sales.