The Chrysler group foresees a year-over-year sales increase this year.
The company reiterated its forecast after reporting a 17 percent drop in operating profit in the first quarter.
A worldwide drop in sales was among the reasons for the profit decline, the Chrysler group said in announcing financial results Thursday, April 28.
In the first quarter, Chrysler's operating profit totaled $327 million, compared with $393 million in the period a year ago.
The company blamed the appreciation of the euro against the dollar, higher raw material costs and a drop in worldwide sales.
Revenues fell 6.1 percent to $13.9 billion, the company said.
Chrysler increased its percentage of fleet and lease sales in the first quarter compared with a year ago. And U.S. marketing costs as a percent of revenues climbed.
For example, U.S. marketing costs as a percent of revenue were 22.9 percent in the first quarter, up 2.5 percentage points from the period a year ago.
Fleet sales climbed 3.4 percentage points to 30.6 percent of U.S. sales. Leasing represented 18.0 percent of U.S. retail sales, up 3.5 percentage points from the period in 2004.
Chrysler is "not afraid" of leasing in the 18 percent to 20 percent range, Bodo Uebber, DaimlerChrysler AG's CFO, said in a conference call with analysts.
A rise in interest rates makes leasing "a little more attractive," he said. Additionally, the company offers more vehicles more popular to lease such as the Chrysler 300C sedan, Uebber said.
"The Chrysler group anticipates a very intensive competitive situation for the rest of the year," the company said. "Overall, the Chrysler group expects to achieve higher unit sales in 2005."
The Chrysler group's worldwide sales fell 3 percent to 666,700 units in the first quarter compared with the same period in 2004.
DaimlerChrysler reported net income of $374 million in the first quarter. That compares with $534 million in the period a year ago. The company blamed losses at its Mercedes car group and the restructuring of its Smart unit.
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