Chrysler is to increase production of its hugely successful 300C model to around 300,000 cars per year to meet growing demand in the US.

The Financial Times German edition said the announcement is further good news for Chrysler, which has seen its market share and sales figures in the US rise steadily.

Analysts expects third quarter figures for Chrysler, which will be released on Thursday, to show a significant improvement on last year, when the company reported a loss of €506 million, the report added.

However, the paper said the outlook is not so good for Mercedes, whose profits and image have been hit following quality problems and whose profit margin is currently only just over 6%.

Despite these problems for Mercedes, analysts predict that the DaimlerChrysler group will report operating profits of €1.38 billion euros, an increase of 11%, the FT said, noting that earnings of nearly €4.96 billion in the first nine months of this year are almost as much as DaimlerChrysler made during the whole of 2003.