Launch costs hurt Chrysler

RUSSELL HOTTEN

Chrysler, America's third largest carmaker, saw third-quarter profits decline 46 per cent from a year ago as the cost of new launches mounted.

The company, under fire from potential bidder Kirk Kerkorian to improve shareholder value, did not help its case by reporting earnings down from $651m to $354m. The profits translated to 91 cents a share, compared with $1.76 in the third quarter of 1994.

Chrysler said profits were lower mainly due to reduced production of minivans during the changeover to a new model, costs related to the minivan, higher rebates and other buyer incentives, and the deterioration of the Mexican economy.

Traditionally, third quarters are troughs for America's big three carmakers because of the cost of model changeovers, vacation-slowed production and slower summer sales.

Chrysler's profits grew from the second quarter to the third, and July- September was the third-best third quarter in company history, Robert Eaton, the chairman, said. "Customer response to our new minivans has been outstanding, and we expect to be near full minivan production capacity by the end of the fourth quarter."

Chrysler's revenue for the quarter rose to $12bn from $11.7bn in the same 1994 period. In the first nine months, Chrysler profits have fallen to $1.08bn, or $2.82 a share, from $2.5bn, or $6.92 a share, in the same 1994 period. Revenue was relatively flat at $38.1bn, against $38bn a year ago.

Chrysler, which has been linked with a possible tie-up with Sweden's Volvo, achieved combined sales in the US and Canada of 560,000 vehicles in the quarter, a market share of 13.6 per cent, up 0.1 per cent.

Internationally, Chrysler's retail sales for the third quarter totalled 40,120 units, up 27 per cent over the 1994 period. Chrysler sold 21,918 vehicles in Europe in the third quarter, an increase of 36 per cent over the same period in 1994.

The automaker approved an increase in its common stock repurchase programme during the quarter, from $1bn to $2bn to be completed by the end of 1996. It said that through the first nine months it repurchased 17.4 million shares of its common stock at a cost of $782m.

The US's biggest carmaker, General Motors, reports profits on Tuesday, when it is also expected to show a year-on-year fall. Along with Ford, the big three's combined third-quarter profits are likely to total about $1.2bn, down from about $2.3bn a year ago.

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Syria civil war: Meet the military commander who says his soldiers will not rest until every inch of their war torn country is free of Islamist 'terrorists'

‘We won’t stop until Syria is back to normal’

Near the front lines with Islamist-controlled towns where Assad’s troops were besieged just last month, Robert Fisk meets a commander confidently preparing his soldiers for battle
Fifa corruption: Strip Qatar of the World Cup? Not likely

Strip Qatar of the World Cup? Not likely

But if a real smoking gun is found, that might change things, says Tom Peck
Twenty two years later Jurassic Park series faces questions over accuracy of the fictional dinosaurs in it

Tyrannosaurus wrecked?

Twenty two years on, Jurassic Park faces questions over accuracy
The inside story of how Bill Clinton built a $2bn global foundation may undermine Hillary's chances

The inside story of how Bill Clinton built a $2bn global foundation...

... and how it may undermine Hillary's chances in 2016
Genes greatly influence when and how many babies a woman will have, study finds

Mother’s genes play key role in decision to start a family

Study's findings suggest that human fertility is still evolving
12 best olive oils

Extra-virgin, cold-press, early-harvest, ultra-premium: 12 best olive oils

Choosing an olive oil is a surprising minefield. Save yourself the hassle with our handy guide
Rafa Benitez Real Madrid unveiling: New manager full of emotion at Bernabeu homecoming

Benitez full of emotion at Bernabeu homecoming

There were tears in the former Liverpool manager’s eyes as he was unveiled as Real Madrid coach. But the Spaniard knows he must make tough decisions if he is to succeed
England can win the Ashes – and Elvis Presley will present the urn

England can win the Ashes – and Elvis will present the urn

In their last five Test, they have lost two and drawn two and defeated an India side last summer who thought that turning up was competing, says Stephen Brenkley
Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)