News Column

Chrysler's second quarter profits could shrink

August 6, 2014

By Brent Snavely, Detroit Free Press



Aug. 06--Chrysler, the engine generating profits for the Fiat Chrysler Automobiles for three years, is expected to report a decline in second-quarter profits this morning .

Last week, CEO Sergio Marchionne said net income for the North American business of FCA fell because of the cost of launching the 2015 Chrysler 200 and higher incentives on some of Chrysler's s older models.

"I think we need to become a lot more disciplined on the pricing side," Marchionne said.

About 85% of Chrysler's operating profits come from North America.

Fiat reported last week that its second-quarter earnings fell 55% because new car sales fell in South America and Chrysler was less profitable.

Marchionne said older models such as the Jeep Patriot, Jeep Compass and Chrysler 300 have not been significantly updated for several years and dealers are discounting them to achieve sales targets..

According to Edmunds.com, incentives for the first six months of the year increased 47% for the Chrysler 300, 136% for the Dodge Dart, 228% for the Fiat 500, 37% for the Jeep Compass, 44% for the Jeep Grand Cherokee and 44% for the Jeep Patriot.

Incentives for Chrysler's popular Ram 1500 pickup have decreased by 5% over the first six months of the year, Edmunds.com research shows.

Chrysler has boosted incentives 21% for its heavy duty Ram 2500 and 52% for the Ram 3500.

Contact Brent Snavely: 313-222-6512 or bsnavely@freepress.com. Follow him on Twitter @BrentSnavely.

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(c)2014 the Detroit Free Press

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Source: Detroit Free Press (MI)


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