Chrysler reported a small profit for the first quarter, reflecting lower shipments of vehicles to Europe and a slow down in production for the U.S. connected with new model launches. The company’s overall outlook, though, remains positive as it moves toward a likely initial public offering.
Chrysler Group said first quarter net income net income dropped 65 percent to $166 million, compared with $473 million for the same quarter last year. It was the seventh consecutive quarter of positive net income for the Auburn Hills, Mich., automaker controlled by Italian automaker Fiat.
The rest of the year looks good for earnings recovery as Chrysler ramps up production of the new Jeep Cherokee, and upgraded Jeep Grand Cherokee and Ram pickup. Both the Grand Cherokee and Ram have been very popular with the public and contribute a huge percentage of the company’s profits.
“We remain on track to achieve our business targets, even as the first-quarter results were affected by an aggressive product launch schedule,” said Chrysler CEO Sergio Marchionne. “This quarter underscores the importance of an unwavering commitment to execute flawless vehicle introductions to reach our full potential. While the task ahead this year is daunting, we remain committed to our overall targets, including a minimum shipment increase of 8 percent and a modified operating profit of $3.8 billion.”
Because of lower shipments of vehicles to dealers, Chrysler also saw a 6 percent drop in revenue for the quarter to $15.4 billion from $16.4 billion in the first quarter of 2012.
Marchionne said Chrysler Group is standing by its guidance for the year, including worldwide shipments of 2.6 million to 2.7 million units, operating profit of approximately $3.8 billion and net income of approximately $2.2 billion.
Chrysler’s operating profit dropped 41 percent to $435 million, or 2.8 percent of revenue, in the first quarter, versus $740 million reported in same period the prior year. Chrysler’s worldwide vehicle shipments were 574,000 units for the quarter, down from 607,000 a year ago. The drop is due primarily to the end of Jeep Liberty production, which accounted for 31,000 shipments.
Chrysler emerged from Chapter 11 bankruptcy in 2009 with help from tax-payer loans and an equity stake by the United Auto Workers Healthcare Trust. Chrysler has paid back all its loans to the U.S. and Canada. It is going through a process of negotiations and litigation to sort out a plan and schedule to buy out the UAW.
Chrysler has a good deal of upside over the next two years because not only is its SUV and pickup truck business already strong, but it will continue to replace underperforming passenger cars and crossovers that were designed under previous ownership. Marchionne said, for example, that the current Chrysler 200, which is considered a weak competitor in the mid-sized sedan segment, will be replaced in 2014.
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There are times when you see your friend dating the absolute wrong person. You know it, they know it, and yet the relationship lingers, slowly causing you to think, maybe instead of hoping they break up, you should break up with your friend. Because it’s just too damn tiring to hear all the complaining.
This is the exact scenario I try to avoid when friends ask me if they should buy aJeep Wrangler. Man, I see the appeal. Driving a Jeep is like being 19 and free again – it’s the freedom to drive over curbs or right up onto the beach or straight up a set of stairs. It’s that same euphoria you had after leaving high school and realizing no one could tell you what to do anymore. At least, not until you got a job.
I want one myself. But my friends and I, we are not people of means. We can’t afford to have one car just forweekend fun, and one car to drive to work. We’re also getting a little old. So when my friends ask me about the Wrangler, I think about their kidneys and their spines getting sore after hours jostling down the freeway, and their empty wallets after filling up the gas tank. And I almost always push them in another direction.
But I just spent a week test-driving the newJeep Wrangler Sahara edition. There is no mistaking that this car is an off-roading Jeep, made with rock climbing and sand dunes in mind. But Jeep has also made this a gentler ride, more comfortable on the highway. Read on to see if the changes are enough to make it a car I’d put on my recommend list.
MSRP: $27,995
Price as tested: $35,360
Engine: 3.6 liter V6
Transmission: 5-speed automatic
Performance: 285 horsepower, 260 pound-feet of torque
Fuel economy: 17 city, 21 highway, 18 combined
Seating: 4
Cargo: 12.8 cubic feet
This is the one of the Jeepiest Jeeps on the market. Everything about its exterior shows this truck is made with purpose in mind.
The exterior hinges on the door show how easily the doors can be removed– which is useful when off roading so the driver can see rocks and other obstacles on the side of the car. The latches to the hood are on the outside. It comes with giant wheels – the size depends on which model you are driving, but the Sahara we tested came with 18-inch wheels with on- and off-road tires.
There is nothing trendy about this truck. Current fashion inSUVs is to make them smaller and more car-like, but the Jeep Wrangler is all truck. It looks similar to the first Wrangler, born in 1986. They have a similar grill, similar boxy stance, and same fenders that don’t quite reach the bumper. But the 1986 version came with optional square headlights, and the modern truck comes with just circular headlights.
If you loved the Wrangler at any point in its 27-year existence, there’s no reason you won’t love the looks of the current model.
Here is where the die-hard off-roading Jeep enthusiasts and I might part ways. The interior of the Sahara we tested was delightful. It came with soft brown leather seats, which made it feel as if you were a cowboy riding in a really comfy saddle. It came with all the creature comforts– navigation, a USB port inside a lockable arm rest so you can stow away your iPhone but still listen to music, heated seats, tire pressure monitoring, power windows, a leather wrapped steering wheel and a temperature and compass gauge.
Not exactly roughing it, I admit. But I am not someone who thinks you need to suffer in a bare bones off roader in order to feel like you’ve accomplished something. A little butt warmer on a cold day out in the forest could actually come in quite handy. A lot of off-roading enthusiasts would disagree.
Let’s face it, the Wrangler is pretty small. The two-door Sahara isn’t exactly family friendly (you’ll want to upgrade to the four-door Wrangler Unlimited if you plan on regularly carrying backseat passengers.) My kids didn’t mind popping the seat forward so they could climb in the back, but it took a bit of muscle. It wasn’t a job my 6-year-old could handle on his own.
As for cargo space, a couple of bags of groceries fit easily in the back. If you need more room than that, this isn’t exactly the vehicle for you.
Where do we start? Well, on the first day the Wrangler was at our house, I took the kids out to show them what it could do. But I quickly realized there wasn’t much I could show them, so we went to an industrial park and I drove over a bunch of those cement blocks that mark the end of a parking spot. That was fun, and easy, and did nothing at all to harm the Jeep.
But a couple of days later, the folks at Jeep let me plow the Sahara around their proving grounds in Chelsea, Mich. There is really nothing this little truck can’t do. We went up stairs. Up a 45-degree sand hill. We went crawled over rocks, drove through ditches, bounded around in fast circles in a sand pit. The Jeep acted as if it was no big thing.
Some folks might favor manual transmissions over automatic, but if you’re really going to go climbing around on rocks with this Jeep, I’d suggest taking the automatic. It makes taking slow downhills on rocks or sand very, very easy.
But the most important factor I was judging this Jeep on was its behavior on the highway and city roads. Was this a car I could recommend to friends? I came away thinking yes, I could. Although it still maintains some of that jumpy Jeep feel, the Sahara’s 18-inch wheels give it a nice, smooth feeling on the road. I never felt like I was fighting with the car on the highway, even when I was commuting home on a windy, rainy day.
The Jeep comes equipped with Chrysler U-Connect, which recently won AOL Auto’s Tech of the Year award. We loved the system because it doesn’t go too far in replacing buttons and knobs with flashy touch-screen controls, and responds well to voice commands. And the touch screen is fast, acting more like an iPad than a slow, clunky car map.
UConnect is a $495 option.
Well, it’s not great. Getting 21 mpg on the highway and 17 mpg in the city is something drivers never would have noticed back in the late 1990s, when gas was less than $2 a gallon. But now that it’s almost always over $3 and many times tops $4, those kind of mileage figures can hurt.
Especially if you plan to commute far in this vehicle. On the upside, though, off roading doesn’t take all that much gas. You could do a day on the Rubicon Trail and use less than a half tank of gas.
The Sahara is a nice Jeep, comfortable enough to make it a reasonable option for someone’s daily car. With just two doors, though, it’s not a great choice for families. That’d take moving to the Wrangler Unlimited Sahara, which starts at $31,295.
Still, given the amount of gas it uses, you’d really have to love this truck to make it your own. Another option– and one I’m considering for myself – is to put aside a couple thousand dollars and buy a used Jeep for weekend playing.
But if you really love the Wrangler, and have access to a good chiropractor, you won’t mind the occasional bounces down the highway.