Thanks to strong sales of pickup trucks and sports utility vehicles, General Motors and Chrysler Group – both victims of the 2008 automotive crisis that forced them into filing for bankruptcy -- were both able to post solid financial performance in the third quarter of 2013.
GM posted a 15-percent surge in pretax profit in the quarter to $2.64 billion, excluding several non-recurring items that trimmed about $900 million from the bottom line. GM logged $38.98 billion in net revenues in the third quarter of 2013, compared to $37.58 billion in the same period in 2012. For the bottom line, the carmaker posted a drop in net income in the third quarter of the year, from $1.85 billion in 2012 to $1.70 billion in 2012.
One-time expenses linked to the repurchase of 120 million preferred shares from the UAW's health-care trust during the period have resulted to a 53-percent drop in net income to $698 million.
Chrysler Group, on the other hand, logged a 22-percent jump in net income in the July to September 2013 period, to $464 million, compared to $381 million in the third quarter of 2012. Its net revenues for the third quarter of 2013 were pegged at $17.56 billion, with a gross margin of $2.68 billion. These compare to $15.48 billion in the same period in 2012, with a gross margin of $2.56 billion.
The carmaker was able to achieve this despite having to delay the rollout of the 2014 Jeep Cherokees into the fourth quarter to fix quality problems. Chrysler had to depend on the re-engineered Jeep Grand Cherokee and Ram pickup line to boost its results.
The strong results came despite logging a decline in market share in the United States and losses in several Asian markets, excluding China. GM and Chrysler’s third-quarter results highlight the carmakers’ heavy reliance on pickup trucks, even as small cars and crossovers continue to rise in importance in their offerings.
Chrysler sold 17,456 more Ram pickups and 10,943 more Grand Cherokees in the US in the third quarter of 2013 than the same period in 2012.
Both models are among Chrysler’s most profitable units. Chrysler chief executive Sergio Marchionne has acknowledged problems with the rollout of the Cherokee, including the carmaker’s decision to close part of its Toledo Assembly facility for 10 months while it got ready to build the new SUV.
It resulted to the absence of a mid-sized SUV in Chrysler’s lineup for almost all of 2013. Chrysler started production of the Cherokee on June 24, 2013, but deliveries to dealers only commenced last week.