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Wednesday, 26 July, 2000, 18:35 GMT 19:35 UK
Chrysler drags down Daimler
James Holden, in charge of Chrysler Cars and Jürgen Hubbert, who runs Mercedes-Benz, at the DaimlerChrysler results presentation
Different fortunes: Chrysler's James Holden and Mercedes-Benz' Jürgen Hubbert
The German-American car giant DaimlerChrysler has reported a strong boost in sales during the first six months of the year, but its US operations turn out to be a drag on profits.

The company, number three in the automotive world, said sales were up by 17% to 84.7bn euros ($80bn, £52bn), while profits rose by just 10% to 5.07bn euros ($4.8bn, £3.1bn).

DaimlerChrysler
Mercedes
Chrysler
Plymouth
Dodge
Jeep
The company also warned the costs of replacing the ageing line-up of Chrysler vehicles would "depress its operating profit in the second half, especially in the third quarter of 2000".

DaimlerChrysler's sales of Mercedes-Benz luxury cars and its ultra-compact line of Smart cars both reported a sharp increase in sales (up 10%), and profits (up 17%).

DaimlerChrysler boss Jürgen Schrempp at the presentation of his firm's results
DaimlerChrysler boss Jürgen Schrempp warns that this year's results will be not as good as in 1999
Chrysler Group, meanwhile, saw its operating profit drop 12% during the second quarter.

Weakening demand for cars in the United States has prompted Chrysler and its rivals to offer buyers generous discounts.

According to David Garrity, analyst with Dresdner Kleinwort Benson, during June Chrysler spent $2,264 per vehicle as incentives to shoppers - up $500 on a year earlier.

The firm now hopes that products like its new PT Cruiser and a new line of Minivans launched on Monday can revive the brand.

The PT Cruiser has so far proved to be a remarkable success with both critics and consumers. However, its 'halo' has done little to boost sales of other Chrysler cars.

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03 Jun 00 | Business
Automotive Empires
12 May 00 | Business
Analysis: Europe's car industry
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