Chrysler to target $1000 per vehicle cost cut

BEIJING, Nov 18: The head of the Chrysler unit of DaimlerChrysler said on Saturday the company will target cost cuts of $1,000 per vehicle through increased outsourcing outside of North America and other savings.

''We are willing to import, with the focus on being competitive,'' Chrysler head Tom LaSorda told reporters at the Beijing International Automotive Exhibition.

He said that over the next six to 12 months, the company would identify cost reductions averaging $1,000 per vehicle, with part of that coming from outsourcing.

He did not specify where the outsourcing would be done, saying ''we are going to source where we can get good low-cost components and high quality.'' LaSorda did not comment on whether layoffs would be a part of the cost savings as they have been at Ford and GM.

Chrysler's parent, the world's fifth-biggest car maker, maintained its 2006 profit forecast after strong third-quarter profits at Mercedes and its truck business helped absorb a 1.16 billion euro ($1.46 billion) loss at Chrysler.

LaSorda also said the company would focus on increasing sales outside of North America, where it has typically generated 85-91 percent of sales.

''Others have been more aggressive in Asia, we have to pick up the pace,'' he said.

Separately, LaSorda noted that the company was in talks with China's Chery and one other non-Chinese company about a production alliance to build a small fuel-efficient car, but he gave no further details.

Chrysler currently has no offerings in the small-car segment, which is growing in the United States and represents a larger share of sales in Europe and other markets.

Executives said the company was developing more right-hand drive models as well as diesel models to boost its competitiveness in international markets.

The group was rigorously reviewing what steps were needed to rescue profits at Chrysler while it launches a string of fuel-efficient cars to energy-conscious buyers.

U.S. rivals General Motors and Ford have also struggled in their home market as Asian car makers claim market share by offering fuel-efficient alternatives to the pickup trucks and sport utility vehicles Detroit has come to love.

(US$=7.87 yuan)

REUTERS