Chrysler counts on small cars

DETROIT — Chrysler is moving to become a company that's less reliant on trucks for profits and more competitive internationally with a portfolio of smaller cars, its top executive said Monday.

Tom LaSorda, president and chief executive of DaimlerChrysler AG's Chrysler Group, said trucks and bigger sport utility vehicles historically have accounted for more than 70 percent of Chrysler's U.S. sales. So the company has been hit harder than any other manufacturer by the shift toward more fuel-efficient vehicles, he said.

"We're addressing those issues and moving our product portfolio to a mix that's more in line with the recent realities and market trends," LaSorda said in a speech to the Automotive Press Association.

DaimlerChrysler last week projected Chrysler's third-quarter loss would be $1.52 billion, more than twice what it had previously anticipated. High gas prices also have hurt cross-town rivals Ford Motor Co. and General Motors Corp., which also log most of their sales in the truck segment, while the more fuel-efficient car segment is dominated by Asian competitors.

LaSorda said Chrysler has 10 new models coming out this year.

"Many of those new entries catch the wave of the move to more fuel-efficiency," he said, touting the Dodge Caliber and Jeep Compass small SUVs and the Chrysler Sebring sedan.

The company also will step up its international sales initiatives because those markets are growing while North American demand has remained stable, he said. During the first eight months of the year, Chrysler's international sales rose 14 percent, he said.

Chrysler is particularly interested in entering the subcompact car market across the globe, but LaSorda said the only way to do that profitably is through an alliance with another manufacturer. He would not confirm reports in German news magazine Der Spiegel and in The Detroit News that Chrysler is looking at selling cars made by China's Chery Automobile Co. Ltd. for North American and international markets, but he said an alliance with a Chinese manufacturer has not been ruled out.

LaSorda acknowledged that he moved too slowly in reducing Chrysler's bloated inventory of trucks and SUVs.

The company announced last week that it will cut retail shipments by 16 percent in the second half of the year to 705,000 vehicles from the previous target of 840,000.

The cuts mean some plants will see temporary shutdowns between now and the end of the year. Chrysler officials said mostly truck plants would be affected, but they declined to pinpoint exactly which plants.

Executives have said there were no immediate plans to slash jobs or close plants permanently as Ford and GM have done recently, but they didn't rule anything out.

With the production cuts and new models coming out, Chrysler's inventory should be back to normal in a few months, LaSorda said.

"We should be in good shape by the end of the year, that's our plan," he said.