Chrysler is the surprising comeback kid. When Chrysler emerged from Chapter 11 bankruptcy in 2009, skeptics were abundant, but the automaker has proven them wrong, living up to promises made two years ago culminating with delivery of a profit.
Chrysler announced Wednesday its first full-year profit since 2005 and two years after it emerged from Chapter 11 bankruptcy. The automaker posted net income of $183 million, compared with a net loss of $652 million in 2010. It includes the fact that Chrysler paid in full its loans from the U.S. and Canadian governments $551 million in the second quarter. Net revenue for the year was $55 billion, up 31 percent from a year ago.
For the year, Edmunds.com's data shows Chrysler improved U.S. sales volume by 26 percent in 2011 — the biggest percentage hike of any major automaker selling cars in the United States. That pushed Chrysler's U.S. market share up 1.3 percentage points. Incentives on U.S.-sold vehicles were down 13.3 percent in 2011 to an average of $2,784 per vehicle, or $426 less per vehicle than the year before. As a result, Chrysler boosted its average transaction price by 3.1 percent per vehicle — or $896 — in 2011 to $30,174.
Chrysler closed the year on a very high note. Net income totaled $225 million, up from a loss of $199 million year earlier. Fourth-quarter revenue rose 41 percent to $15.1 billion. In the fourth quarter, Chrysler's U.S. incentives spending was among its lowest of any quarter in the past two years. That, combined with a batch of freshened product, pushed the average transaction price on every vehicle it sold to its highest level in at least two years — maybe ever — at $30,603 a vehicle, according to Edmunds.com's calculations. Chrysler increased vehicle sales in the quarter by 35 percent compared with a year earlier.
A profit of $183 million profit is meager in the cash-gobbling auto industry. Momentum continued for Chrysler in January with sales up 44 percent, albeit buoyed by a reported 28 percent of those sales being derived fleet orders. Edmunds.com's forecast calls for Chrysler to report another double-digit year-over-year sales increase for — again the biggest gain of any major automaker. Its U.S. incentives spending is expected to be even than in the fourth quarter at an estimated $2,351 per vehicle.
"We're looking at 2012 with some degree of optimism, but it's not going to be a walk in the park," Chrysler CEO Sergio Marchionne said in a conference call Wednesday.