Chrysler Cautious On Sales Outlook

GENEVA – Even as Chrysler Group continues to break away from the pack reporting a 7.5% U.S. light-vehicle sales increase in February, its top sales executive says he is cautious about what the rest of the year will bring.

Unlike its domestic competitors, Chrysler saw car sales increase 21% during the month, while truck sales rose 4%. (See related story: Chrysler Sees February Gain; Grand Cherokee Still Trails Year-Ago)

“We obviously want to continue our profitable and positive sales momentum, and from that perspective we are quite pleased with the first two months in the U.S,” Joe Eberhardt, Chrysler Group senior vice president-sales, tells Ward’s in an interview here. “You never know what (will happen) in the market and what (will happen) competitively. But looking at our internal plan and what is happening against it, we are satisfied with the developments and we expect for the full year a sales improvement in 2005.”

Eberhardt says it’s important to note the first few months of the year are traditionally strong ones for Chrysler, due in large part to higher fleet volumes.

Joe Eberhardt, senior vice president-sales, Chrysler Group.

Indicators point to yet another potential weakening in the U.S. market in the short term, he adds, which could cause further incentive battles. But he says Chrysler will concentrate on boosting profits, not market share.

“There are signs the overall market is weakening and that impacts everybody. If forced to decide between profit and market share, we will always decide on the profitability side,” he says.

“We probably would be satisfied with just a smaller increase or holding share or even declining share. We need to market and work to our own business plan and right now that plan seems to be working.”

As the auto maker continues on its course to expand its presence in markets outside of North America, Eberhardt expects international sales to remain relatively flat for the year.

Chrysler sold nearly 170,000 units in international markets in 2004, including about 120,000 vehicles in Europe, where the auto maker will make its biggest push for growth in the coming years. (See related story: Dodge Right ‘Caliber’ for Europe)

While 2005 will provide an influx of new product into Europe via the Chrysler 300 Touring wagon and Jeep Grand Cherokee, expectations are for the continent to remain stable in 2005, with big growth seen coming in 2006.

“We don’t expect to gain significant volume because the launch of some of the major volume products that we have seen earlier in the (North American Free Trade Agreement) markets will come with a time lag,” he says, adding, “2006 will be the year where we expect significant increases in the European market.”

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