Chrysler is looking to make inroads into the competitive midsize market segment with the news 2015 Chrysler 200.
Following a 23% jump in revenue during the first quarter, Chrysler Group LLC expects sales to continue climbing during the balance of the year as the new Chrysler 200 rolls into showrooms, following the successful launch of the new Jeep Cherokee.
While Chrysler reported a net loss of $690 million for the quarter, a result of special charges taken because of Fiat SpA’s acquisition of the United Auto Workers VEBA’s ownership stake in Chrysler. Richard Palmer, FCA’s chief financial officer, said Chrysler was sticking with its original full-year guidance, which includes a substantial sales increase.
“The key is we need to grow volume as we go into the second half,” Palmer said during a conference call with analysts.
Chrysler expects worldwide vehicle shipments of 2.8 million units with revenue of $80 billion, Palmer said. Chrysler also expects a modified operating profit of $3.7 billion to $4 billion and adjusted net income of $2.3 billion to $2.5 billion with free cash flow of $500 million to $1 billion.
Palmer also said FCA, which noted that Chrysler will continue to have its own balance sheet because of has issued debt under the Chrysler name, is looking at ways to restructure its finances.
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“We clearly need to simplify the capital structure of the wider group, the refinancing of the Chrysler debt is a major issue,” Palmer said. “But that has to be weighed against the cost of calling any bonds. It’s a bit early to say what we might do with the debt in ’15 and ’16. We’re having a continuing dialogue with the market.”
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Last week, Sergio Marchionne, Chrysler’s chief executive officer, said having debt is good discipline tool for companies.
Worldwide vehicle shipments were 668,000 for the quarter and up from the 574,000 vehicles, shipped during the year-ago period. Additionally, worldwide vehicle sales were 621,000 for the first quarter compared with 563,000 sold in the first quarter of 2013. The 19% jump was driven largely by an increase in the company’s U.S. retail sales.
(To see more about Chrysler’s reported earnings for Q1, Click Here.)
Chrysler Group’s U.S. market share was 12.5% for the quarter, up from 11.4% a year ago; market share in Canada was 16.6%, up from 16% in the year-ago period.
U.S. dealers’ days supply of inventory at the end of March 2014 was 71 days, compared with 79 days at the end of December 2013, and 66 days at the end of March 2013.