Chrysler’s Quarterly Net Income Plummets 46%

Costs and lost production from the launch of its new generation of minivans, combined with a steep sales plunge in Mexico, helped depress Chrysler Corp.’s third-quarter profit by 46%, the company said Wednesday.

The results by the No. 3 domestic auto maker were not unexpected, because the third quarter is historically the weakest for the Big Three.

But Chrysler’s poor showing in Mexico provided a graphic illustration of the severe impact that country is having on U.S. companies operating there. Mexico has been struggling through a severe recession since late 1994.

Chrysler sold only 6,000 vehicles in Mexico for the July-September quarter. That’s fewer than it sells in the United States during a typical day. A year earlier, Chrysler sold 24,000 vehicles in Mexico in the period.

The auto maker reported that net earnings for the July-September period were $354 million, or 91 cents a share, compared to $651 million, or $1.76 a share, in last year’s third quarter.

Model changeovers, vacation-slowed production and sluggish summer sales have always depressed third-quarter results for U.S. auto makers. But Chrysler’s profit grew from the second quarter to the third, mainly because much of the cost of introducing the minivans--including higher rebates to clear out old models--was absorbed in the second quarter.

Rebates and other buyer incentives cost Chrysler about $870 a vehicle in the third quarter, compared to $1,035 in the second.

Its profit-per-vehicle was $492, down about $109 from a year ago but $189 higher than in the second quarter.

Chrysler’s revenue for the quarter rose to $12 billion from $11.7 billion in the same 1994 period.

For the first nine months of this year, Chrysler profit fell to $1.08 billion, or $2.82 a share, from $2.5 billion, or $6.92 a share, in the same 1994 period. Revenue was relatively flat at $38.1 billion, compared to $38 billion a year ago.

General Motors Corp. will report earnings Tuesday; Ford Motor Co.’s report is due a day later. Those figures are also expected to show year-over-year drops in profit.

Combined, the Big Three’s third-quarter profits are likely to total about $1.2 billion, down from about $2.3 billion a year ago.