DETROIT (Reuters) - Chrysler Group LLC reported a quarterly net loss yesterday, underscoring the pressure on the smallest US automaker from a slack economy and an ageing product line-up.

The automaker, which plans an IPO next year, said US sales grew 12 percent in the first half of the year, lagging the industry's nearly 17 percent growth.

Chrysler chief executive Sergio Marchionne said the automaker had an "extraordinary amount of work" remaining in its turnaround but its restructuring was on track.

The automaker, which emerged from a US-government supported bankruptcy in June 2009 under the management control of Italy's Fiat SpA, said it could raise its financial outlook later this year.

"The real key to Chrysler's long-term viability remains growth in its retail sales," said Charles Moore, managing director at Conway MacKenzie, which provides crisis management and turnaround advice to companies. "That's not going to be based on one quarter or two quarters."

Moore said it will take the next 24 months to see whether the Chrysler product plan is extensive enough to attract new customers.

Chrysler's rival General Motors Co, which also restructured in a government-funded bankruptcy, is preparing for an IPO possibly later in 2010.

GM will report second-quarter results on Thursday and is expected to show a profit. Ford Motor Co posted a $2.6 billion second-quarter profit.

Chrysler said it still expected to at least break even on an operating basis in 2010 and that it was highly likely to raise its profit and cash-flow projections when it announces third-quarter results.