Strong Chrysler output buoys faltering Fiat
DETROIT -- Chrysler Group is on a pace to meet its ambitious target to ship 2.4 million vehicles worldwide in 2012, as Fiat S.p.A., the automaker's Italian parent, prepares to slow its output to deal with the economic crisis in Europe.
Hitting the target is important because it means Chrysler can continue to meet rising demand for its vehicles in North America -- and continue to boost profits here -- even as its parent company struggles.
Through September, Chrysler plants in the United States, Canada and Mexico have produced 1.8 million vehicles, up 22 percent from the same period last year. The company's 2.4 million unit goal this year is 20 percent higher than the 2 million unit goal it reached in 2011.
Chrysler-Fiat CEO Sergio Marchionne said he plans to update Fiat's production plans when the two companies announce their earnings on Oct. 30. Fiat owns 58.5 percent of Chrysler, which -- according to Fiat's second quarter earnings statement -- has accounted for all of the parent company's profits so far this year.
Chrysler's production run-up hasn't resulted in a corresponding inventory increase for dealers. The company said it had a 65-day supply of unsold vehicles on Oct. 1, near the 60-day level viewed as ideal by most automakers.
If Chrysler Group is to meet its year-end North American production goal, it will have to boost the output at other factories to make up the production being lost at its Toledo North Assembly plant.
The Toledo plant stopped production in August for a $500 million renovation to make the next generation of the Jeep Liberty; production begins on the new vehicle early next year. Toledo North produced almost 31,000 vehicles in the fourth quarter of 2011.
But by year end Chrysler will have added two additional shifts of about 1,100 new workers each at assembly plants in Belvidere, Ill., and Detroit. Belvidere Assembly builds the Dodge Dart, along with the Jeep Compass and Patriot, while Chrysler's Jefferson North Assembly plant in Detroit builds the Jeep Grand Cherokee and Dodge Durango.
Production at Belvidere is up 9 percent through the first nine months of 2012, while output at Jefferson North is up 19 percent, according to the Automotive News data center.
But R.L. Polk doesn't think Chrysler will reach the 2.4 million mark this year. Tom Libby, Polk's North American forecast manager, predicted Chrysler would produce 2.25 million vehicles in 2012.
You can reach Larry P. Vellequette at email@example.com.