Marchionne said on a media call that it should be a simple recalibration of the powertrain controller when the fix is found with no expensive hardware changes, but admitted the second half hinges on selling the new Cherokee, which replaces the defunct Liberty.
Chrysler Group today reported its Q2 2013 results, posting a profit of $507 million, an increase of 16% compared to the $436 million in the same quarter in 2012. This was the Group’s eighth consecutive quarter of positive net income.
However, the slowly improving trend is threatened in the second half of the year by the admission by CEO Sergio Marchionne (he had to since it’s material to results under SEC regulations) that the new Jeep Cherokee was not shipping as planned starting in June even though it is in ful production in Ohio. The Cherokee problem is caused by an unspecified calibration issue on its new 9-speed ZF supplied automatic transmission.
Marchionne said on a media call that it should be a simple recalibration of the powertrain controller when the fix is arrived at and not involve expensive hardware changes, but admitted that positive Chrysler second half results hinges on selling the new Cherokee, which replaced the Liberty that has been out of production for many months with a corresponding loss in revenue. (First Fiat Platform Jeep Debuts in fall as 2014 Cherokee)
Net revenue increased 7% to $18 billion from $16.8 billion last year, largely because of an increase in vehicle shipments, including the revised Jeep Grand Cherokee and Ram pickup trucks. Global retail sales of 643,000 increased 10% from a year ago, led by a 17% increase in U.S. retail sales. Net revenue totaled $33.4 billion for the first half of 2013. (Chrysler Group Q1 Profits Drop to $166 million) U.S. market share was 11.4% for the second quarter, compared with 11.2% a year ago. Chrysler Group market share was 15.1% in Canada, up from 14.5% a year ago.
There was a $151 million charge for the NHTSA negotiated safety recall for the 1993-1998 Jeep Grand Cherokee and the 2002-2007 Jeep Liberty fuel tank fires, and the customer satisfaction action for the 1999-2004 Jeep Grand Cherokee. (Chrysler Finally Agrees to Fix Jeep Fuel Systems after a Long NHTSA Probe and Formal RecallRequest)
