The Chrysler Corp. is the nation's third largest auto maker, and, currently, the most financially troubled.

While General Motors and Ford reported robust first quarter profits and American Motors - aided by sales of its Jeep models - managed to just hang in the black, Chrysler reported a $119.8 million loss, the largest quarterly deficit in the company's history.

The red ink can be attributed to Chrysler's sliding share of the U.S. auto market, recall problems which have badly hurt sales of its Dodge Aspen and Plymouth Volare models, and start-up marketing and production costs on its subcompact Omnis and Horizons which were introduced to great fanfare and initial sales success in January.

"The last nine months will be a break-even period," Chrysler Chairman John Riccardo grimly noted when the first quarter loss announcement was made, indicting that the full year would also show Chrysler in the red by roughly $120 million.

For the No. 3 auto maker, the loss would be the third in five years. It registered net deficits of $52 million in 1974, and $260 million in 1975 - the latter a record. And it comes on top of 1977's relatively slender profits of $163 million when Chrysler's world-wide sales totaled $16.7 billion.

The latest earnings downturn comes at a time when Chrysler has embarked on an ambitious $7.5 billion, five-year spending program meant to overhaul its car lines so it can garner a greater share of the market in competion with GM and Ford, and also to pay for government-mandated fuel economy and safety standards that go into effect during this period.

But the persistent losses have raised questions about whether the company will be able to obtain financing to see it through its five-year plan, since internal funds clearly will be inadequate.

Riccardo and Chrysler President Eugene Cafiero faced angry share-holders at the company's recent annual meeting, some of whom called for their resignations, claiming they could run the company better.

But the Chrysler executives managed to get shareholder approval for a plan to issue up to 20 million shares of preferred stock this year, expected to be distrbuted mainly to individual shareholders in a convertible issue that could raise about $500 million.

While it would improve Chrysler's equity position, the financing would represent just a down payment on its total needs.

With $1.3 billion in long-term debt outstanding, the company has been told it would have great difficulty raising new money in the bond markets where its debt securities are already rated BBB by Standard and Poor's, except at rates exceeding 11 per cent.

So the company also is pressing the federal government for low-interest loans, using the argument that its lower unit sales make the government-ordered fuel and safety improvements more financially burdensome for it than they are for Ford and GM.

The introduction of the Omni and Horizon earlier this year made Chrysler the first American car manufacturer to product a front-wheel-drive subcompact in the United States. And Chrysler went from a standing start of zero percent of the subcompact market to about a 20 percent share in April and May.