DETROIT -- Chrysler Group's board will consider an initial public stock offering after reporting an operating profit of $143 million for the first quarter, CEO Sergio Marchionne told analysts and journalists today.
“This is an issue the board will look at very closely for the remainder of 2010,” Marchionne said on a conference call this morning. “The fact we've gotten this far would suggest there's a strengthening base for looking at an IPO in a much shorter time frame than most people would expect.”
Marchionne spoke with analysts in what he promises will be a regular quarterly conference call.
He attributed the operating profit to several factors: “price discipline, rigorous inventory management” and a strong schedule of new product launches.
“If we can make money at this level, it's a good indication” that the automaker should continue to be profitable for the rest of the year, Marchionne said.
Chrysler's performance depends on how well the current market recovery holds up, he said.
“We are forecasting 2010 will end up around 12 million” sales, Marchionne said. “It's an indication we've found the bottom of this market.”
In March, Chrysler's U.S. market share was 8.7 percent vs. 11.8 percent in March 2009, according to the Automotive News Data Center.
Chrysler dealers held a 58-day supply of vehicles, a number Marchionne said he is comfortable with. Sixty days is considered normal.
In slides presented to analysts, Marchionne showed that Chrysler has cut incentives from more than $5,000 per vehicle in the first quarter of 2009 to an average of $3,500 in the first quarter of 2010. The average transaction price has increased from $25,400 in the first quarter of 2009 to $27,800 in the first quarter of 2010.
Updates on Genesis
Marchionne and CFO Richard Palmer covered other areas in today's call:
• Chrysler is on target to get all of its 2,332 dealerships to carry all four brands by the end of 2011 under the Project Genesis consolidation plan. Currently, 83 percent of dealerships have all the brands -- Chrysler, Dodge, Jeep and Ram.
• Ninety percent of all retail customers are now making loan applications to GMAC Financial Services, now known as Ally Financial Inc.
• Seventy percent of dealers now have floorplanning with GMAC, or $4 billion in financing.
• Chrysler launched production of the 2011 Jeep Grand Cherokee this week.
• More than two-thirds of U.S. dealers are profitable, and the number is improving, Marchionne said.