Chrysler Group: Q1 Profit First Since Formation

May 2, 2011 by · Comments Off on Chrysler Group: Q1 Profit First Since Formation 

Chrysler Group LLC today (May 2) announced its preliminary financial results for the first quarter 2011, reporting that it achieved its first quarterly net income since the company began operations in June 2009.

Net Income in Q1 2011 was $116 million, compared to a net loss of $197 million in Q1 2010.

“Chrysler Group’s improved sales and financial performance in the first quarter show that our rejuvenated product lineup is gaining momentum in the marketplace and resonating with customers,” said Sergio Marchionne,  CEO of Chrysler Group LLC. “These results are a testament to the hard work and dedication of our employees, suppliers and dealers, all of whom are helping Chrysler create a new corporate culture built on the quality of our products and processes, and simple, sound management principles.

“We remain focused on delivering great products to our customers and continuing to achieve the sales and financial targets outlined in our 2010-2014 business plan,” added Marchionne.

[Slashdot] [Digg] [Reddit] [Facebook] [Google] [StumbleUpon]

Chrysler Group Will Repay All Bailout Loans

April 28, 2011 by · Comments Off on Chrysler Group Will Repay All Bailout Loans 

Chrysler Group LLC  announced today (April 28) that it intends, subject to market and other conditions, to repay in full the outstanding obligations under the loans provided to Chrysler Group by the U.S. Department of the Treasury and the Canadian federal and Ontario governments, according to a news release.

Chrysler Group intends to complete the repayment during the second quarter of 2011 from proceeds of a new term loan facility and newly issued debt securities to be offered and sold to institutional investors in a private offering exempt from registration under the U.S. Securities Act of 1933.

Chrysler Group intends to use the net proceeds of the term loan and the offering, together with the proceeds from the recently announced exercise by Fiat of an option to acquire an incremental ownership interest in Chrysler Group, to repay its loans from the U.S. and Canadian governments in full and to pay related fees and expenses. The completion of the offering, the credit facilities and the equity investment by Fiat under its call option are expected to occur concurrently.

The debt securities will be offered and sold in reliance on an exemption from registration under the Securities Act. The debt securities have not been registered under the Securities Act, or the securities laws of any other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from registration.

[Slashdot] [Digg] [Reddit] [Facebook] [Google] [StumbleUpon]

Chrysler Debates the Future of Its Minivans

January 20, 2011 by · Comments Off on Chrysler Debates the Future of Its Minivans 

Chrysler Group LLC is debating the future of its minivans even as it starts making the 2011 Dodge Grand Caravan and Chrysler Town & Country this week, The Associated Press reported.

“We need to completely rethink the minivan,” CEO Sergio Marchionne said Tuesday (Jan. 18) at the Canadian plant where Chrysler’s minivans are made. “We need to retain all its functionality but make it much more versatile.”

Marchionne said that could mean new products that can still carry a lot of people but won’t look like traditional minivans. A team within the company is also studying whether to continue both the Town & Country, which is more upscale and starts at $30,000, or the Grand Caravan, which is about $7,000 cheaper. Both are made on the same frame.

At the Detroit auto show last week, Marchionne said offering both minivans in Chrysler dealerships is confusing to customers.

Marchionne said Chrysler Group LLC is developing a new frame that can be used for minivans or other kinds of vehicles and will come out in 2013 or 2014. That will allow the company to build smaller minivans, crossovers or cars, depending on what buyers want.

That’s a similar strategy to Ford, which released a new small minivan at the Detroit auto show last week. The company’s seven-seat C-Max minivan is built on the frame of a Ford Focussmall car. The van will go on sale at the end of this year. Hybrid and electric versions will follow.

Now, only minivans can be built off Chrysler’s minivan frame.

Chrysler also plans a hybrid minivan by 2013, Marchionne said.

Dodge brand president Ralph Gilles said a team within Chrysler is determining its next moves but is far from deciding whether to cancel either the Grand Caravan or the Town & Country. The team wants to watch 2011 sales.

He also said Chrysler needs to proceed carefully with products that have been popular. The company has sold 13 million minivans since it first launched them in 1983.

“You’d hate to kill a nameplate that’s recognized,” he said.

Chrysler controls about a third of the U.S. minivan market, but rivals are nipping at its heels. The Chrysler Town & Country was the top-selling minivan in the U.S. last year, with sales of 112,275, or about 4,000 more than the Honda Odyssey.

“We are not going to give up one inch of territory,” Marchionne said.

Chrysler said the 2011 versions of its minivans have a new V-6 engine with improved fuel economy. One amenity is an optional heated steering wheel, a first among minivans.

[Slashdot] [Digg] [Reddit] [Facebook] [Google] [StumbleUpon]

Cummins/Chrysler Extend Engine Agreement

February 3, 2010 by · Comments Off on Cummins/Chrysler Extend Engine Agreement 

Cummins Inc. today (Feb. 3) announced a multiyear extension of its current agreement with Chrysler Group LLC. Cummins will supply 6.7-liter Turbo Diesel engines for Ram Heavy Duty pickups and Chassis Cab trucks while continuing to grow its partnership with Chrysler, which began 21 years ago, according to a news release.

Cummins has produced over 1.7 million Cummins Turbo Diesel engines for Dodge Ram Heavy Duty trucks since 1989. Today, over 80% of Ram Heavy Duty truck customers purchase their truck with the legendary Cummins Turbo Diesel.

The first Cummins Turbo Diesel was used in the 1989 Dodge Ram, with projected sales of less than 5,000 engines. Actual sales exceeded 20,000 engines in the first year, signaling to the market that a powerful new combination had been created.

The first Cummins Turbo Diesel was a 5.9-liter at 160 hp (119 kW) and 400 lb-ft (542 N.m) of torque. Today’s 6.7-liter Turbo Diesel delivers 350 hp (261 kW) and 650 lb-ft (881 N.m) of torque. This 118% increase in horsepower and 86% increase in torque have been achieved while also reducing exhaust emissions by 90%. In 2007, Dodge and Cummins produced the cleanest heavy-duty diesel pickup in the market by meeting U.S. Environmental Protection Agency (EPA) 2010 emissions levels a full three years in advance.

“Cummins and Chrysler have a long and important history together,” said Dave Crompton, vice president and general manager, MidRange Engine Business. “The Chrysler business continues to be a key part of our MidRange engine business. Cummins is proud to supply engines for the award-winning Ram Heavy Duty and to continue working with Chrysler to develop best-in-class products that customers can trust and depend on now and in the future.”

[Slashdot] [Digg] [Reddit] [Facebook] [Google] [StumbleUpon]

Chrysler Group LLC Has Big Plans for Ram Trucks

December 8, 2009 by · 1 Comment 

logoChrysler Group LLC wants to make its new Ram truck brand as big, bold and profitable as the full-size pickups that are its cornerstone, and plans to do it by expanding into commercial vans and potentially big rigs, according to The Detroit News.

Building on the success of Chrysler’s truck division is part of the Auburn Hills automaker’s five-year plan to return to profitability by 2011. The plan includes putting more emphasis on individual brands and incorporating products from Italian partner Fiat SpA.

One of Sergio Marchionne’s first moves after taking over as Chrysler CEO was splitting Dodge into two brands: Ram for pickups and commercial vehicles and Dodge Car for everything else, including minivans and SUVs. Ram is banking on trucks’ high profit margin and the brand’s history of innovation, including features such as the box storage unit available on the newest models, to boost sales, market share and profits.

“It’s not such a terrible idea to take the Dodge truck and try to brand it as an entity because it really doesn’t fit the car business,” said Gary Dilts, senior vice president at J.D. Power & Associates and former head of sales for Chrysler. “A Dodge Ram truck is in a totally different hemisphere than a Dodge Caliber.”

The goal is to boost global Ram truck sales from 280,000 today to 415,000 in 2014, mostly in North America.

Steady growth will come from product improvements, significantly more advertising than has been done in the past, and adding new commercial vans to the Ram lineup, Fred Diaz, Ram brand chief, said in a recent interview with The Detroit News.

By 2012, two new Ram commercial vans will be for sale in the U.S. and the brand could broaden further as Chrysler considers adding 18-wheelers to the Ram product portfolio, Diaz said.

Also key to the Ram expansion is Chrysler’s partnership with Fiat, the third-largest producer of commercial vehicles in the world. Fiat has commercial vans that can be imported fairly quickly, as well as its Iveco brand of big trucks that are popular in Europe and Australia but not sold in North America.

“Pre-Fiat Chrysler would have had nothing to compete in many (truck) segments,” said James Bell, executive market analyst with Kelley Blue Book in Irvine, Calif. “But with Fiat they do.”

Still trail Ford, Chevy trucks

All Ram products still fall under the Dodge umbrella and the Dodge name will be somewhere on every vehicle, Diaz said, but “Dodge” does not appear on a new Ram’s head logo that will debut on trucks in about six months. Nor will “Dodge” appear in advertising for the trucks, Diaz said.

While the pickup is one of Chrysler’s jewels and holds 16.5% of the market, its U.S. sales pale against the No. 1 selling Ford F-150 and the Chevrolet Silverado.

But analysts say if Chrysler continues to improve the pickup and the brand becomes a credible player in the commercial truck market, Ram will establish itself as a stronger brand.

Changes are planned from bottom to top.

The smallest vehicle in the Ram brand, the Dodge Dakota compact pickup, will be discontinued in 2011 but may be replaced with a car-based — or unibody — midsize truck to better differentiate it from the larger, body-on-frame Ram pickup.

The commercial truck sector includes the all-new Ram 2500 and 3500 heavy-duty pickups, which were completely redesigned for the 2010 model year.

Up another rung are the Ram Chassis Cabs, often used as a base for ambulances and other emergency vehicles, and work trucks. Chrysler introduced the 3500 Chassis Cab in 2007 and claimed a 28% share of the segment.

“We were new to that space and knew we had a hit on our hands,” Diaz said. The automaker followed up with the larger 4500 and 5500 chassis cabs in 2008.

Next fall, all three chassis cabs will be completely redesigned and introduced as 2011 models.

The commercial segment

Continuing along the evolutionary scale for the brand are plans to add a small and large commercial van from Fiat in 2012.

The small van is expected to be the Fiat Doblo, which was redesigned and goes on sale in Europe next month as a seven-seat passenger van or a cargo van.

A name has not been chosen for the Ram version, which will compete against the well-received Ford Transit Connect that went on sale this summer. Like the Transit Connect, the Doblo is expected to be imported from Turkey.

Ford has the small commercial van market to itself and is doing much of the work to establish the segment in the U.S., said John Sousanis, director of information content for Ward’s Information Products in Southfield, Mich. “Bringing in a competitor right away seems like a prudent move.”

Diaz said Chrysler is studying what changes, if any, Fiat vehicles would need to bring them to the U.S.; the business case will weigh those costs, and the expense of shipping from Europe, against the cost of building in North America.

The large van coming in 2012 could be the Fiat Ducato to fill the gap that will be left by the Daimler-built Dodge Sprinter. Dodge’s contract to sell the Sprinter ends Dec. 31. After that, it will be sold only by Mercedes-Benz and Freightliner dealers.

“If the Ram brand is going to compete as a commercial-grade truck-only brand, it can’t afford not to play in the commercial van segments,” Sousanis said.

U.S. sales of large vans dropped to 248,600 in 2008, down from more than 325,000 vehicles two years ago. Analysts expect sales to recover with the economy.

Importing commercial vans is “really good business,” J.D. Power’s Dilts said. The vans are not as profitable as Ram pickups, but a fleet order provides constant production of a vehicle with margins not subject to fluctuating market conditions and incentives.

Ram brand aims big

Chrysler’s partnership with Fiat could allow the Ram brand to expand into the big rig market.

“We’re giving serious consideration to entering the heavy truck segment, which includes the 18-wheelers you see out on the road today,” Diaz said last month.

But in an interview he said getting into those trucks, known as Class 8, would be a huge undertaking and is not imminent. “We need to focus on the business at hand and get healthy as a corporation before we venture too deep.”

There is no urgency. The heavy truck market “has been in the absolute gutter for two years,” Sousanis said. With 74,380 trucks sold through October, sales are unlikely to hit 100,000 this year, down from 284,000 in 2006. Many players have consolidated or closed.

It is a bold but possibly risky move, said Rajesh Kothari of Seneca Partners Inc. in Birmingham, who monitored the big truck industry for years.

Adding commercial vehicles complements the big-rig look Dodge introduced with the 1994 Ram pickup. “If the new Ram brand wants to be viewed as truck central,” Kothari said, “it can only add toughness to the brand.”

[Slashdot] [Digg] [Reddit] [Facebook] [Google] [StumbleUpon]