What a rollercoaster ride Chrysler has been through in the past few years. In four years time, the company has had three owners, filed for bankruptcy, and now, for the first time since the Chapter 11 filing, reported a net profit in the first quarter of 2011.
Compared to the $197 million loss from the same time period last year, the Auburn Hills, Michigan-based automaker posted a net income of $116 million for Q1. Its modified operating profit grew $334 million from 2010 to $477 million dollars, and net revenues were up to $13.1 billion — a 35-percent gain from the first quarter of 2010. The company’s level of available cash on hand grew by $2.5 billion from the end of 2010 to $9.9 billion at the end of March 2011.
Much of the growth is due to an onslaught of new and revised products through the beginning of the year. Chrysler has introduced 16 all-new or heavily revised models for the 2011 model year for its five brands (including Fiat). In the first quarter, Chrysler sold 394,000 vehicles, up 60,000 vehicles from the same time in 2010; market share for vehicles from Chrysler, Dodge, Jeep, Ram, and Fiat rose 0.1 percentage point to 9.2 percent in the U.S., and up a full percentage point to 14.7 percent in the Canadian market.
The profit news comes on the heels of the company announcing that, assuming its financial results stay stable, it will repay all of its outstanding loans of $7.5 billion from the U.S. and Canadian governments by the end of June 2011. CEO Sergio Marchionne says in a prepared release that he believes the high interest rates on these loans (which, ironically, helped keep Chrysler alive) prevented Chrysler from reporting a profit in 2010. Once the loans are repaid, Italian automaker Fiat — which currently owns 30 percent of Chrysler — will be able to increase its ownership to 51 percent, a goal it aims to reach by the end of the fourth quarter of this year.
Will the fiscal growth continue? If these results are based upon infusing new products into Chrysler’s portfolio, then all signs point to yes. The product overhaul is expected to continue in the years to come, as the company intends to leverage Fiat-developed technologies and platforms to develop and launch a number of all-new products, including smaller, more fuel-efficient cars.
Sources: Chrysler, Automotive News (Subscription required)