New products selling with lower incentives boosted the Chrysler group's second-quarter profits. Chrysler's operating profit totaled $628 million in the second quarter. It posted an operating loss of $1.16 billion in the year-ago period.
Company executives say the Chrysler group is poised to deliver "considerable positive earnings" in 2004 despite the U.S. price war.
In the second quarter, U.S. marketing costs as a percent of revenue totaled 20.4 percent. That is an 8.3 percentage-point decline from the year-ago period. Marketing costs include rebates and advertising.
The Chrysler group's revenues rose to $16.08 billion in the second quarter, compared with $14.41 billion in the same quarter of 2003.
More customers than expected are ordering top-of-the-line vehicles equipped with the company's V-8 Hemi engine, says Chrysler CEO Dieter Zetsche.
Hemi installation rates are running 47 percent on the Dodge Ram, 56 percent on the Dodge Durango, and 46 percent on the Dodge Magnum and Chrysler 300, the company says.
Chrysler's fleet sales, typically less profitable than retail sales, dropped to 27.5 percent of total sales in the second quarter, vs. 29.8 percent in the year-ago period.
Chrysler's performance represented the fourth consecutive quarter of positive operating results.
DaimlerChrysler AG reported second-quarter operating profit of $2.54 billion on revenues of $45.15 billion. In the year-ago period, the company reported operating profit totaling $781 million on revenues of $41.23 billion.