Chrysler Group will reduce its third-quarter retail shipments by 90,000 units, mostly among trucks and SUVs that have suffered declining demand amid higher gas prices.
The automaker, in a presentation posted to its Web site ahead of an analyst day, said it now is planning 290,000 retail shipments in the third quarter, down from a prior projection of 380,000. For the entire second half, the company lowered its retail shipment plan to 705,000 units from 840,000.
Chrysler Group expects a third-quarter retail market share of 10.6%, compared with a prior plan of 11.2%. The company anticipates a second-half retail share of 11.7%, down from its earlier plan of 12.6%.
lowered its 2006 profit forecast last week because of big losses at the Chrysler Group division. The company forecast a $1.2 billion full-year operating loss at Chrysler, citing excess inventory, higher fuel prices and a shift toward smaller vehicles.
The company echoed those issues in its presentation slides, saying that Chrysler Group's dealer inventory mix wasn't well balanced to meet the increased demand for smaller vehicles. Chrysler also noted that competitors made price reductions, particularly on light trucks and SUVs, in July and August.
each launched 0% financing programs during the summer, while Chrysler did not.
Chrysler Group previously planned to reduce dealer inventories during the third quarter to 600,000 units from 645,000 units. The company now expects to reduce inventories "substantially further."