GENEVA -- Chrysler, the U.S. arm of auto giant DaimlerChrysler AG, said on Tuesday it would have to beat its own target to cut costs by 7.2 billion euros ($7.86 billion) in 2003 by a wide margin.
"We need to overachieve that by a considerable amount," Chrysler's Chief Operating Officer Wolfgang Bernhard told Reuters in an interview at the Geneva auto show, referring to the savings target that was set two years ago.
Chrysler returned to profit earlier than expected last year but momentum slowed in the fourth quarter as its marketing costs ballooned. It is aiming to post an operating profit of two billion euros in 2003, up from 1.3 billion last year.
Bernhard declined to give a specific forecast for marketing costs for 2003 but would not rule out the possibility of a rise from the level seen in the fourth quarter of last year, when they accounted for almost a quarter of revenue.
"I would not exclude a rise in marketing costs but I wouldn't exclude anything," he said.
Chrysler's February U.S. sales fell 4.5 percent to 170,614 units, a slightly stronger performance than the market as a whole but much weaker than the group's Mercedes-Benz brand, which saw U.S. sales climb 8.1 percent.
Chrysler posted fourth-quarter operating profit of 77 million euros ($84.04 million), with marketing costs jumping to 24 percent of revenue from 16.3 percent in the third quarter.
DaimlerChrysler, the world's fifth-biggest carmaker, is two years into a restructuring program to return Chrysler to profit. The group said last month it expected to post higher earnings this year than last.
It posted an adjusted operating profit of 1.173 billion euros for the fourth quarter, bringing its adjusted operating profit for 2002 to 5.8 billion euros.
Restructuring at Chrysler includes a 20 percent cut in its workforce, price reductions from suppliers and greater cost savings with the group's Mercedes unit and Japanese partner Mitsubishi Motors Corp.