Automaker Chrysler Shrinks Losses in Second Quarter

One year after coming out of bankruptcy protection, the Chrysler Group is minimizing its losses and experiencing rising demand for its trucks and cars. However, the automaker is still not exactly healthy, and its chief executive officer admits the company has difficult work ahead of it.

On Monday, Chrysler said that rising car and truck sales assisted in narrowing its loss for the second quarter to $172 million, a respectable improvement from its first-quarter loss of $197 million.

Chrysler’s main markets are the United States and Canada, and both countries have experienced higher demand since the slump caused by the recession last year. In the second quarter, Chrysler’s revenues increased 8.2 percent to $10.5 billion, mostly because of a substantial increase in sales. On the other hand, a large part of those sales were to government fleets, business fleets, and rental-car companies, which are not as profitable as sales to individual consumers.

Chrysler remained in bankruptcy protection for the better part of the second quarter of 2009. Since emerging from Chapter 11 in June of 2009, Chrysler has been managed by Fiat, an Italian carmaker.

In the past few months, Chrysler received a boost from the debut of the 2011 Jeep Grand Cherokee, the first new auto Chrysler has debuted since Fiat assumed control. Chrysler intends to develop over a dozen new and refreshed trucks and cars in the remaining months of 2010. Such models include a revised Chrysler 300 and the American debut of the minicar Fiat 500, a compact car to which Chrysler hopes Americans will take a liking.

The automaker’s U.S. market share has risen to 9.4 percent, but that is still less than the 12.9 percent during the second quarter of 2007, which is the last time Chrysler posted results in the second quarter.

During March through June, Chrysler posted an $183-million operating profit, which is 28 percent higher than that of the first quarter.