Chrysler Investors have a Reason to Party

by Darcie | Friday, Feb 3, 2012 | 442 views

Chrylser has declared that will bring cheers to the investors. The company reported a 44 percent increase in its sales. The company said its Chrysler, Dodge, Jeep and Ram brands combined to give the company its best January tally in four years. The company has mentioned the key to improvement in sales has been the Sedan vertical. Company’s such as Hyundai and Kia are also expected to report big sales over the year. Ford has already mentioned healthy numbers over the quarter.

Analysts expect key automakers to have a significantly profitable year this quarter. Analysts expect the sales could be in the range of 13.63 million in December. Chrysler Group LLC said it sold 7,007 Chrysler 200 midsize sedans last month, more than eight times the number it sold in January of 2010, a poor month for the company. In addition, the Chrysler 300 large sedan saw sales rise almost quadruple over a year earlier. The company is also gaining due to the competitors losing foot. Toyota and Honda have lost market share over the year due to incidents.

However the macro economic situation still is a cause of concern. Unemployment rate is still a cause of concern. Consumer spending is at its all time low and with increase in fuel prices there are still concerns over the future consumption pattern. U.S. auto sales rose 10 percent to 12.8 million in 2011. That was up 23 percent from 2009, when the U.S. auto industry and the financial system were in peril.

We maintain a buy on the stock at current price. We believe that the product mix combined with the dealership strength of the company, the profitability could benefit the company over the long run.


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