Business

Wednesday, Nov. 04, 2009

Technology, cash to remake Chrysler’s auto lineup

AUBURN HILLS, Mich. — Chrysler plans to pump life into its car lineup with technology from its new Italian partner, Fiat SpA, and says it has the cash to do it as it starts to combine the two automakers.

CEO Sergio Marchionne, who also runs Fiat, began unveiling Chrysler’s new five-year business plan on Wednesday. The plan includes multiple new vehicles for the Chrysler, Jeep, Dodge and Ram brands, most based on Fiat’s more efficient transmissions and small engines.

He said the troubled company’s cash has grown by nearly $2 billion since it exited bankruptcy protection in June, and its operations broke even in September because of savings from job cuts and factory closings by the prior owner and through combining Chrysler and Fiat’s operations.

But future growth depends on offering better cars. The company’s mid-sized sedans, the Dodge Avenger and Chrysler Sebring, along with many other models, have flopped.

Chrysler said it will update these cars to make them more comfortable and quieter and use Fiat technology to replace them in 2012. That could make it competitive in the largest part of the U.S. car market.

In addition to the midsize car, Chrysler will also introduce four new Dodges by 2013, as well as new exteriors, interiors and engines on most of its current product lineup.

The new Dodges include a seven-passenger crossover vehicle, a mini-car and a compact.

Ralph Gilles, the company’s chief designer who became head of Dodge, said the brand will have crisp handling, be quieter, more fuel-efficient and have more luxurious interiors.

The company also is lowering prices to boost sales and generate more cash as it fixes its struggling lineup.

The new and revamped vehicles should please Chrysler’s dealers, many of whom have been frustrated by a lack of detail from Marchionne’s management team.

But Aaron Bragman, an auto analyst with IHS Global Insight, said there were many questions remaining, including what the vehicles will look like and how Chrysler will pay for such a major turnaround.