If analysts hit the mark with their forecasts, the Chrysler Group should have good news to report this week.
The US arm of DaimlerChrysler expected to post a significant, year-over-year increase in profitability. Industry observers look for the Auburn Hills, Michigan-based automaker to increase operating profits as much as 20 percent, in sharp contrast to the anticipated plunge at Chrysler's German counterpart, Mercedes-Benz, where the financial picture is increasingly bleak.
For the year as a whole, David Healy of Burnham Securities expects Chrysler to generate 29 percent of DaimlerChrysler's operating income this year, up from 23 percent last year, and a flat zero the year before.
Healy expects Mercedes, meanwhile, to see operating income dip from 57 percent of the total in 2003 to a meager 13 percent when this year's results are tallied up.
Chrysler chief executive Dieter Zetsche "has done a hell of a job" since launching an austere turnaround program in January 2001, Healy said.
With a mix of cost cuts, quality improvements and striking new products, Chrysler has not only reversed its fortunes, but inverted the hierarchy at DaimlerChrysler, and its status as the strongest of the traditional domestic brands seems likely to continue for at least the near-term future, he said.
Recent weeks have brought bleak news from the company's rivals, however. After signaling to Wall Street that things weren't looking good, General Motors Corp revealed it lost US$1.1 billion during the first quarter, while drawing down cash reserves by a sizable US$3.5 billion. For the first three months of the year, GM's US market share sank 1.1 points year-over-year, to 25.2 percent, its lowest level in nearly three-quarters of a century.
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