DETROIT - Chrysler is having some growing pains.
The country's third-largest automaker said Tuesday that its sales picked up in the second quarter thanks to strong U.S. demand for trucks and SUVs. But the company cut its target for full-year sales and profit, blaming persistent problems as it adds more shifts and ramps up production of vehicles like the Ram pickup and the Jeep Cherokee small SUV.
"You need to remember that in 2010 we produced 1 million cars. We're now at two-and-a-half times that level," CEO Sergio Marchionne said in a conference call with analysts and media.
Marchionne said making sure Detroit-based Chrysler has enough parts from suppliers has been a problem.
Chrysler is also adding more workers, like the second shift of 1,100 people who will start making Cherokees next month and the 1,250 people who will start making transmissions in Kokomo, Ind., early next year.
Chrysler isn't the only automaker who has had problems ramping up production. Ford Motor Co. delayed the launch of the new Lincoln MKZ sedan this spring because of production and quality issues.
But Marchionne said Chrysler is unusual because it's updating so many products and parts at once. He also says Chrysler had a lot of catching up to do when its majority owner, Italian carmaker Fiat SpA, brought it out of bankruptcy four years ago.
Chrysler sold 643,000 vehicles worldwide in the second quarter, up 10 percent from a year ago. Chrysler's U.S. sales rose faster than the industry average of 8 percent in the second quarter.
Still, because it lost first quarter sales and will be slow to launch the new Cherokee, Chrysler doesn't expect to meet the targets it set at the beginning of this year. The Auburn Hills, Mich.-based company now expects to ship 2.6 million vehicles worldwide in 2013, at the low end of its goal of between 2.6 million and 2.7 million. It expects to earn between $1.7 billion and $2.2 billion, down from its previous target of around $2.2 billion.
Chrysler said its net income rose 16 percent to $507 million in the April-June period from $436 million a year ago. It was Chrysler's eighth straight quarterly profit.
Revenue rose 7 percent to $18 billion from $16.8 billion.
Chrysler still expects full-year revenue of $72 billion to $75 billion. Chrysler CFO Richard Palmer said customers are adding more features and paying more for their vehicles, so even if sales slide, revenue won't. Buyers paid an average of $29,100 for Chrysler vehicles in the second quarter, up $800 from last year, the company said.
Original Print Headline: Chrysler profits rise as forecast lowered
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