Chrysler sees a strong 2010

City A.M. Reporter
CHRYSLER forecast an operating profit this year, thanks to cost cuts, but chief executive Sergio Marchionne said the automaker had to “fight harder” to revive its image and seize market share.

Chrysler projected a $700m (£434.2m) operating profit for 2010 after stripping out financing costs tied to its government-funded bankruptcy. It previously projected it would break even or earn $200m on that basis.

Chrysler also pinned its 2010 revenue forecast at around $42bn, in the middle of its earlier range of $40bn to $45bn.

The automaker has said it plans a public offering of shares in the second half of 2010. Chrysler’s larger rival, General Motors, is slated to go public later this month.

Chrysler was on the brink of liquidation in 2009 before a US government-funded bankruptcy slashed its operating costs and gave majority ownership to a union-affiliated trust fund and management control to Fiat SpA. The company is introducing 16 new or updated models, including the Fiat 500 subcompact. US dealer inventory is expected to rise in the fourth quarter to support the sales of the new products.

Chief executive Sergio Marchionne said he was encouraged by trends heading into 2011, but said the automaker still had much to prove on its path to recovery.

“We got a bloody nose on the way into the recession and I’m not sure we got it all back on the way out,” Marchionne said during a call with analysts. “So we need to fight harder.”

The automaker reported a net loss of $84m, compared with a net loss of $172m in the second quarter. Excluding $308m in interest on loans and other expenses, the company posted an operating profit of $239m, its third consecutive profit on that basis. Revenue rose to $11.02bn from $10.5bn in the second quarter.