Chrysler is said to be reviewing the future of its South American engine joint
venture with BMW as part of its restructuring, according to the Financial Times.
Citing president Dieter Zetsche, the FT said that Chrysler now requires fewer
engines than anticipated from the Tritec factory, the joint venture with the
German auto-manufacturer, in Brazil. The venture is due to supply engines for
both BMW’s new Mini and Chrysler`s Neon compact.
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The reduced number of engines Chrysler needs corresponds with a 15 percent
decrease in Neon production following the axing of a shift at the Belvidere,
Illinois, assembly plant.
The FT says that the next-generation Neon may be built with engines from DaimlerChrysler`s
Japanese alliance partner, Mitsubishi, rather than Tritec.
Mr Zetsche, predicting "heavy under-utilisation" of the Brazilian
engine plant, said that Chrysler had already decided to end production at the
country’s Campo Largo car facility. He said that the Tritec volumes were
clearly below what was originally expected, adding that the company had to look
for alternatives to this plant.
He also said that Chrysler would discuss the future of the plant with BMW once
an internal review of engine demand had been completed. The success of the Mini
will determine "what share of capacity will be used down there by BMW",
added Mr Zetsche, according to the FT. The plant has a 250,000 engine capacity,
with the potential to reach 400,000.
BMW leads the management of the plant, with DaimlerChrysler responsible for
technical management.
BMW, which plans to build 100,000 Minis per year at its Cowley plant near Oxford,
England, is reported to be unaware of any Chrysler change of heart about the
project.
The first engines are set to roll off the production line some time in the
first quarter of 2001 as planned, the FT said.
