Advertisement
YOU ARE HERE: LAT HomeCollections

Chrysler, other U.S. automakers post strong January numbers

As Chrysler reports its first annual profit in years, other U.S. automakers show their strongest January sales numbers since 2008.

February 01, 2012|By Jerry Hirsch, Los Angeles Times
  • The Chrysler 200 is among the new models the company has introduced since emerging from bankruptcy in 2009. And in 2011, the company recorded its first annual profit as an independent company since 1997.
The Chrysler 200 is among the new models the company has introduced since… (Toby Talbot, Associated…)

Chrysler Group reported its first annual profit in years, and the U.S. auto industry displayed renewed vigor, posting January sales numbers that were the strongest for the month since 2008.

Chrysler's profit was a sign that the Detroit automaker is recovering from its bankruptcy reorganization and the conflicting strategies of its recent owners, analysts said.

"It is great to see that the phoenix can come out of the ashes," said Thilo Koslowski, an auto analyst at research firm Gartner Inc. "Chrysler has really changed its culture. The organization is much more empowered than it has been in the past, and it is coming out with exciting products."

Chrysler said Wednesday that it earned $183 million last year, compared with a loss of $652 million in 2010. Sales rose 31% to $55 billion. It was Chrysler's first annual profit as an independent company since 1997.

The automaker is riding a wave of growing auto sales that has caught the entire industry.

Americans purchased more than 900,000 vehicles last month, an 11.4% increase over January 2010, according to Autodata Corp.

"It is significant to see 900,000 in January when much of the country is in a deep freeze," said Bob Carter, Toyota's group vice president and general manager. "We are bullish on where the industry is going."

The volume translates into a seasonally adjusted annual sales pace of 14.2 million autos. With the exception of the federal cash-for-clunkers economic stimulus program in the middle of the recession, that rate was the best since May 2008, according to auto information company Edmunds.com.

Auto executives said the gradually improving economy, stronger consumer confidence and the need to replace an aging U.S. fleet, where the average vehicle is now about 11 years old, contributed to the industry's strength.

Although there's still volatility in the economic news, "in general, it is much more positive than it was six months ago," said Don Johnson, U.S. sales vice president at General Motors Co.

But Hyundai Motor America's chief executive issued a more cautious view.

"Although total industry sales looked strong, our sense is that much of the gain came from the fleet sales," said Hyundai's John Krafcik. Such sales to rental car companies, commercial customers and government agencies are typically less profitable than sales to consumers.

Many automakers posted double-digit sales gains.

Chrysler's January sales were 44.3% above the same month in the prior year, Autodata said. Volkswagen Group was up 39.5%. It was VW's best January in 38 years. Nissan North America sales rose 10.4%; Hyundai climbed 14.7%; Kia Motors America jumped 27.8%; Subaru of America, 20.9%.

Among the top five in sales, Ford Motor Co. sales rose 7.3%. Toyota Motor Corp. sales rose 7.5%. Honda Motor Co. rose 8.8%.

Asian brands are making a comeback after some were hurt by inventory shortages caused by the Japanese earthquake and tsunami last year. The Asian brands held a market share of 45.8% in January, their best since March, when they had 48.5%, Edmunds.com reported.

"The domestics are in for a fight in 2012," said Jessica Caldwell, an Edmunds analyst.

Of the major automakers, only GM posted lower January sales, falling 6.1%. While the results at Chevrolet, its biggest brand, were just below level, sales fell at Buick, Cadillac and GMC.

Sergio Marchionne, chief executive of Chrysler and Fiat, the Italian automaker that owns 58.5% of Chrysler, said competition will only get tougher.

"Nobody is falling asleep at the switch here," Marchionne said.

Since emerging from bankruptcy in 2009, Chrysler has introduced new models and merged development operations with Fiat. A healthcare fund, known as the VEBA trust, operated by the United Autoworkers Union owns the remainder of Chrysler's shares.

Helped by a memorable "Imported From Detroit" advertising campaign launched during the Super Bowl last year, Chrysler sold 1.4 million vehicles in the U.S. last year, a 26% increase over the previous year. Its share of the U.S. market grew to 10.7%, up more than a percentage point, according to Autodata.

The rebirth of the Dodge Dart is one example of Chrysler's changed culture, Gartner analyst Koslowski said. The 2013 model of the Dart will be the first Chrysler vehicle based on a Fiat architecture, in this case the Alfa Romeo Giulietta. It will be produced at Chrysler's assembly plant in Belvidere, Ill.

Chrysler looks to be solidifying its position in the U.S. market after more than a decade of changing owners with varied business strategies.

Daimler, the owner of Mercedes-Benz, acquired Chrysler in 1998 but was unable to integrate the American company into its global operations profitably. The deal was billed as a "merger of equals," but the German automaker called the shots, selling Chrysler to Cerberus Capital Management in 2007.

But Cerberus quickly ran into problems and lost control of the business during the 2009 bankruptcy reorganization and federal government bailout.

Marchionne's strong leadership was "something that was sorely lacking while Cerberus was in control of the company," said Alec Gutierrez, an analyst at auto information company Kelley Blue Book. Cerberus, he said, primarily focused on cost cutting.

For the fourth quarter, Chrysler reported net income of $225 million, a swing from a loss of $199 million for the year-earlier period. It was the company's highest quarterly profit since it emerged from bankruptcy in 2009. Quarterly sales rose 41% to $15.1 billion.

The company also is building up its cash on hand. Chrysler had $9.6 billion at year-end, up from $7.3 billion a year earlier.

jerry.hirsch@latimes.com

Advertisement
Los Angeles Times Articles
|
|
|