ITALY: Chrysler CEO sees $3bn 2012 operating profit
Chrysler Group CEO Sergio Marchionne has said the automaker should make a US$3bn operating profit in 2012 as the US market recovers and global sales rise.
He also expects global vehicle sales of 2m cars and trucks this year and a 20% rise to 2.4m next year, he told the Wall Street Journal at Fiat HQ in Italy.
The bankruptcy restructuring means Chrysler can now be profitable if it sells over 1.5m vehicles a year.
Chrysler booked $1.47bn in operating profits in the first nine months of 2011 but reported a net loss of $42m, partly because it was paying interest on USgovernment loans for much of the year.
The WSJ noted that an increase in operating profit to $3bn is in line with the business Marchionne outlined for Chrysler in 2009 when Fiat took a stake as part of the government-led bankruptcy.
Chrysler has since revamped its model line with improved engines and plusher interiors and its cars and trucks have started to win back US consumers. To the end of November, Chrysler's US vehicle sales have climbed 25% to 1.2m cars and trucks and, last month alone, its sales jumped 45%.
Chrysler has also launched some models in Europe badged as Fiat and Lancia (the Chrysler nameplate remains for the UK) and Fiat is returning the favour with the Alfa Romeo Giulietta platform for the Dodge Dart small sedan Chrysler will launch in the US in 2012, taking it back into an important segment last occupied by the Neon.
The Dart and other new or updated models, and expanded overseas business, should drive sales higher next year, Marchionne told the WSJ.
Chrysler also boosted its bottom line by deciding to borrow money from a group of banks to pay off the $7.6bn in loans it received from the US and Canadian governments to fund its operations during its bankruptcy to reduce the interest rate of over 14%.