Kokomo Tribune; Kokomo, Indiana

Business

August 4, 2013

Business Briefs

(Continued)

Chrysler isn’t the only automaker who has had problems ramping up production. Ford Motor Co. delayed the launch of the new Lincoln MKZ sedan this spring because of production and quality issues.

But Marchionne said Chrysler is unusual because it’s updating so many products and parts at once. He also says Chrysler had a lot of catching up to do when its majority owner, Italian carmaker Fiat SpA, brought it out of bankruptcy four years ago.

“The insistence on quality that was introduced with the new Chrysler back in 2009 is forcing a level of scrutiny that is certainly unusual for Chrysler historically,” Marchionne said.

Chrysler’s first-quarter sales suffered because it was slow to release new versions of the Ram pickup and Jeep Grand Cherokee SUV, two of its most popular vehicles.

Those production issues were resolved by the second quarter. U.S. Ram sales rose 30.4 percent over last year as construction companies and other small businesses raced to replace aging trucks. It was the Ram’s best second quarter since 2007. Grand Cherokee sales soared 27 percent.

Chrysler sold 643,000 vehicles worldwide in the second quarter, up 10 percent from a year ago. Sales were also up 10 percent in the U.S., where Chrysler sells 75 percent of its vehicles. Chrysler’s U.S. sales rose faster than the industry average of 8 percent in the second quarter.

Still, because it lost first quarter sales and will be slow to launch the new Cherokee, Chrysler doesn’t expect to meet the targets it set at the beginning of this year. The Auburn Hills, Mich.-based company now expects to ship 2.6 million vehicles worldwide in 2013, at the low end of its goal of between 2.6 million and 2.7 million. It expects to earn between $1.7 billion and $2.2 billion, down from its previous target of around $2.2 billion.

Chrysler said its net income rose 16 percent to $507 million in the April-June period from $436 million a year ago. It was Chrysler’s eighth straight quarterly profit.

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