Chrysler will be profitable in 2011: CFO

AUBURN HILLS, Michigan (AFP) - Chrysler will achieve a profit in 2011 and be able to pay off its government loans by 2014, the automaker's chief financial officer predicted Wednesday.

The automaker expects a net profit of three billion dollars by 2014, said Richard Palmer in the presentation of Chrysler's five year plan.

Palmer forecast that the automaker will achieve a breakeven operating result for the 2010 results and post 2.5 to 2.7 billion dollars in 2011 earnings before taxes, interest and amortization.

That figure is forecast to double to between 5.9 and 6.4 billion dollars in 2012 and hit 8.0 to 8.5 billion dollars by 2014.

Palmer said a public share offering was "unlikely" before 2011 and added that the automaker can begin to "accelerate" the repayment of US and Canadian government loans beginning in 2011 and pay off the full 7.2 billion dollars by 2014.

Chrysler also intends to more than double its sales from 1.3 million vehicles in 2009 to 2.8 million vehicles in 2014.

Palmer said this is an "achievable" goal given that it represents just a 20 percent growth over 2008 sales.

Chrysler's sales tanked in 2009 amidst a deepening economic downturn and consumer skittishness as it sought a massive government bailout and eventually declared bankruptcy.

Much of the expansion will be a result of the fruits of its alliance with Italy's Fiat, which gained a 20 percent stake in the new company in exchange for sharing its technology.

Fiat's popular 500 minicar will hit the US market in 2010 and Chrysler will soon benefit from a number of new vehicles built on Fiat platforms.

Some 56 percent of Chrysler's vehicles will be built on Fiat platforms by 2014 and the fuel economy of the overall portfolio will improve by 25 percent.

While several current models will be phased out in the coming years, Chrysler said it will expand its offering in the United States to 28 models by 2014 from 23 in 2009.

It also plans to refresh 75 percent of its US vehicle lineup by 2010 and have a totally new lineup by 2014.

It forecast US sales will grow to two million units in 2014 from 950,000 in 2009 as its market share grows from 10.5 to 14.5 percent.

Sales outside of North America are forecast to grow from 150,000 units in 2009 to 500,000 in 2014.

Sales in Canada are forecast to grow 33 percent to 220,000 units in 2014 from 160,000 in 2009.

Mexican sales are forecast to grow to 120,000 vehicles from 80,000 in 2009.

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