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AUBURN HILLS, Mich. - Chrysler hopes to make billions of dollars to repay government loans and revamp all of its cars and trucks with an ambitious plan that hinges on doubling sales in five years.
The plan, which includes spending US$23 billion to overhaul or replace all its Chrysler, Dodge, Jeep and Ram models by 2014, is realistic as demand improves over the next five years, says Sergio Marchionne, Chrysler's new CEO, who has turned around Italian automaker Fiat Group SpA.
Marchionne made his remarks after a daylong presentation of his five-year plan to save the ailing 84-year-old Chrysler. Much of the overhaul includes cost savings from combining purchasing and engineering with Fiat, and using Fiat's smaller, more fuel-efficient designs to replace aging Chrysler vehicles.
Marchionne's Fiat, which now owns 20 per cent of Chrysler with an opportunity for more, was put in charge of rescuing the automaker by the U.S. government. Chrysler emerged from bankruptcy protection in June.
In Canada, the company hopes to increase production by a third over the coming years from an estimated 166,000 vehicles this year to roughly 220,000 in 2014.
Chrysler Canada hopes to increase its market share from around 11 to 11.5 per cent to 13.8 per cent during the same time frame.
Canadian Auto Workers president Ken Lewenza reacted positively to the new business plan.
"This plan for turning around Chrysler is creative, credible, and exciting," Lewenza said.
"There would be many significant positive spin-offs for Canada from the successful implementation of this plan."
Some industry analysts say the automaker's goal of selling 2.8 million vehicles globally in 2014 is overly ambitious because of increasing competition. The company must also fight public perception of noisy, poor-performing vehicles, especially in mid-size sedans, the biggest segment of the U.S. car market.
Sedans like 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, then replace them in 2012 with Fiat designs.
Marchionne says the U.S. market will expand over the next five years, pushing up the company's sales. Chrysler also will have to regain some market share, he said.
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