Chrysler Group posted a quarterly net loss on yesterday, underscoring the pressure on the smallest US automaker from a slack economy and an aging product line-up.
The carmaker, which plans an IPO next year, saw US sales growth of 12 per cent in the first half of the year, lagging the industry’s nearly 17 per cent growth for the same period.
Chrysler chief executive Sergio Marchionne said the automaker had an “extraordinary amount of work” left to do as part of its turnaround but said its restructuring was on track.
Chrysler, which emerged from a US-government supported bankruptcy in June 2009 under the management control of Italy’s Fiat, said it could raise its financial outlook later this year.
Chrysler’s rival General Motors (GM), which was also restructured in a government-funded bankruptcy, is preparing for an IPO possibly later in 2010. GM will report second-quarter results on Thursday and is expected to show a profit. Ford posted a $2.6bn (£1.6bn) second-quarter profit.
Chrysler said it still expected to at least break even on an operating basis in 2010, but it was likely to raise that outlook when it announces third-quarter results.
Ron Bloom, the US Treasury official overseeing the government’s investment in the auto sector, said last week that Chrysler was ahead of where the White House-appointed autos task force had expected at this point.
Officials have previously said the Obama administration was divided over the question of whether Chrysler could be successfully turned around, but gave it a bailout to save jobs and prevent a cascade of failures among suppliers.
The third-largest US automaker said its net loss narrowed to $172m in the second quarter from $197m in the first quarter. The year-earlier quarter included only a few weeks of the operations of the new Chrysler. Revenue rose eight per cent to $10.5bn in the second quarter from the first three months of 2010. Operating profit rose $40m from the first quarter to $183m.
City A.M. Reporter