DaimlerChrysler
has reported a $US600 million return to profit for the second quarter of 2001,
citing a “substantial reduction of losses at Chrysler Group, which fulfilled
all of the milestones set for the first half of 2001″.

The group operating profit, including a one-time effect of $200 million as
a result of the gain in the sale of 60% of the shares in TEMIC, the automotive
electronics subsidiary, was $US800 million, well down on the $US2.2 billion
reported for the second quarter of 2000.

Net profit, including one-time effects, was $600 million (Q2 2000: $1.5 billion)
and earnings per share were $0.62 (Q2 2000: $1.47).

Excluding one-time effects, net profit was $0.5 billion (Q2 2000: $1.5 billion)
or $0.45 (Q2 2000: $1.47) per share.

DaimlerChrysler said it sold 1.3 million vehicles worldwide in the second quarter
of 2001 (Q2 2000: 1.3 million).

Mercedes-Benz passenger car & Smart sales increased 6% but Chrysler reported
a 4% decline in shipments to dealers due to adverse market conditions in North
America.

As a result of the fall in demand for heavy trucks in North America, the Commercial
vehicles division also reported a decline in unit sales of 12%.

Overall group revenues fell in the second quarter by 5% to $35.1 billion.

DaimlerChrysler said in a statement that this was due to the fact that the
prior year’s figures included the revenues of Dasa, debis SystemHaus and Automotive
Electronics (TEMIC). From May 2001, the rail unit Adtranz was also deconsolidated.

Adjusted
for these changes in the consolidated group, revenues were 3% higher than in
the previous year.

For the first half of 2001, group revenues of $65.2 billion were 9% lower than
in the first six months of 2000.

Adjusted for changes in the consolidated group, revenues decreased by 3%.

Operating profit, adjusted for one-time effects, was $0.1 billion (1st half
of 2000: $4.3 billion).

There was adjusted net profit of $0.1 billion (H1 2000: $2.9 billion) and adjusted
earnings per share of $0.14 (H1 2000: $2.91).

Mercedes-Benz and Smart car sales grew by 6% to 328,800 vehicles, while revenues
were up 10% to $10.6 billion and operating profit, excluding one-time effects,
rose by 10% to $703 million.

Worldwide, 295,100 Mercedes-Benz cars were sold, 7% more than in the second
quarter of 2000.

Mercedes-Benz unit sales in Western Europe increased by 11% to 197,800 vehicles
overall but, in the sluggish German home market, growth slowed 7% to 109,000
vehicles though Mercedes-Benz managed to increase market share to 12%.

Sales
fell, however, in the U.S. and Japan though D-C expects that, now all variants
of the C-class are in production, those markets will show some growth in the
second half of the year.

Smart sold 33,700 cars, slightly up on Q2 2000.

“As a result of cost savings achieved by the turnaround plan and the increase
in unit sales over the first quarter, Chrysler Group’s operating loss excluding
one-time effects of $100 million was a significant improvement over the previous
quarter (-$1.2 billion),” DaimlerChrysler’s statement said.

“But there was a negative impact from continuing high U.S. industry marketing
costs and a decline in unit sales compared with the previous year.”

Second-quarter shipments to dealers fell by 4% compared with the previous year
to 821,000 vehicles.

Revenues of $15.5 billion were 1% higher than in 2000.

After declines in April and May, Chrysler Group in June recorded a 1% increase
in retail sales over June 2000.

Chrysler PT Cruiser sales remained high with shipments of 44,400 vehicles in
the second quarter and there was a 16% increase in minivan sales.

By the end of June, dealers had already ordered 60,000 units of the new Jeep
Liberty, introduced in April, which the company said was an even better sales
start than it achieved with the Chrysler PT Cruiser.

The commercial vehicles division reported a 12% decline in unit sales to 127,900
vehicles in the second quarter.

Revenues
of $6.2 billion were 5% below the previous year’s figure. After a loss in the
first quarter, operating profit, excluding one-time effects, of $108 million,
was up again (but below Q2 2000’s $344 million) though still affected by the
“difficult situation” in North America.

At the Freightliner, Sterling and Thomas Built buses unit, sales fell by 35%
to 28,500 vehicles as a result of the decrease in the market for heavy trucks
in North America.

DaimlerChrysler also cited reduced market demand in Europe and the collapse
of markets in Turkey and Argentina for a 14% reduction in Mercedes-Benz truck
sales to 26,100 units.

The difficult market situation in Turkey was also cited as the reason sales
of Mercedes-Benz and Setra buses declined by 4% to 7,200 units.

The Mercedes-Benz vans unit increased sales by 2% to 62,700 vehicles.

Without revealing figures, DaimlerChrysler’s statement said that in the
first quarter of Mitsubishi‘s financial year, which began on April 1, 2001,
unit sales “declined significantly”.

“As part of the turnaround plan, the new management has implemented cost-cutting
measures as well as a new organisational and management structure,” the
statement said.

“Breakeven is anticipated in the current financial year.”

Looking
ahead to the end of 2001, DaimlerChrysler expects that operating profit, adjusted
for one-time effects, for full-year 2001 will be within the previously-announced
range of $1.0-1.4 billion.

“Mercedes-Benz passenger cars & Smart will again exceed the previous
year’s high figures for unit sales, revenues and earnings, due to an extremely
attractive product range, which will be upgraded again in autumn with the new
SL roadster and the revised M-Class,” the statement said.

“Weaker demand for automobiles in the U.S. will lead to a distinct decline
in unit sales by Chrysler Group. The continuation of difficult market conditions
remains a major challenge.

“There will be a decline in unit sales and revenues for the Commercial
Vehicles division as a result of the market slump in North America and the market
downturn in Western Europe.

“Operating profit will decrease significantly because of the situation
in North America. This fall the division will further expand its product range
with the Vaneo compact van and the new Mercedes-Benz Axor range of trucks.”










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