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July 31, 2013

Chrysler’s 2Q net income up

(Continued)

DETROIT —

Those production issues were resolved by the second quarter. U.S. Ram sales rose 30.4 percent over last year as construction companies and other small businesses raced to replace aging trucks. It was the Ram’s best second quarter since 2007. Grand Cherokee sales soared 27 percent.

Chrysler sold 643,000 vehicles worldwide in the second quarter, up 10 percent from a year ago. Sales were also up 10 percent in the U.S., where Chrysler sells 75 percent of its vehicles. Chrysler’s U.S. sales rose faster than the industry average of 8 percent in the second quarter.

Still, because it lost first quarter sales and will be slow to launch the new Cherokee, Chrysler doesn’t expect to meet the targets it set at the beginning of this year. The Auburn Hills, Mich.-based company now expects to ship 2.6 million vehicles worldwide in 2013, at the low end of its goal of between 2.6 million and 2.7 million. It expects to earn between $1.7 billion and $2.2 billion, down from its previous target of around $2.2 billion.

Chrysler said its net income rose 16 percent to $507 million in the April-June period from $436 million a year ago. It was Chrysler’s eighth straight quarterly profit.

Revenue rose 7 percent to $18 billion from $16.8 billion.

Chrysler still expects full-year revenue of $72 billion to $75 billion. Chrysler CFO Richard Palmer said customers are adding more features and paying more for their vehicles, so even if sales slide, revenue won’t. Buyers paid an average of $29,100 for Chrysler vehicles in the second quarter, up $800 from last year, the company said.

Chrysler is also benefiting from sales of money makers like the Jeep Grand Cherokee. Car pricing site Kelley Blue Book said U.S. buyers paid an average of $40,294 for a Grand Cherokee in the second quarter, up 9 percent from a year ago.

U.S. sales were up for the company’s Dodge, Fiat, Jeep and Ram brands; only the Chrysler brand, with aging vehicles like the Town and Country minivan, saw sales drop.

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