Chrysler Group chief executive Tom LaSorda has said that the automaker does not expect to reduce truck production in 2006 even as it continues to introduce more passenger cars and high oil prices negatively impact SUV demand.
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LaSorda, speaking to Dow Jones on Thursday, said the company will roll out new trucks – including a redesigned Jeep Wrangler SUV and a Chrysler version of its Dodge Durango SUV – in 2006, and these new products, in addition to a full year of sales for trucks and SUVs introduced in the second half of 2005, will offset some of the weakness Chrysler has seen in the once-booming pickup and SUV segments where sales of both the high volume Dodge Ram pickup and Dodge Durango have slipped significantly in recent months despite high incentives on both vehicles.
But Chrysler’s sales mix will continue to become more heavily dependent on passenger cars, such as sedans and coupes, LaSorda reportedly said. Dow Jones noted that the company is planning to launch new entries in the small-car and midsize sedan segments that are expected to boost Chrysler passenger car volume.
According to the news agency, LaSorda said the product mix began shifting toward more passenger cars in 2005 by a rate of about 2% to 3% as successful introductions of cars like the Dodge Charger and a strong year of 300 sedan sales helped change the balance – howver, the heavier dependence on cars could impact profitability because such vehicles are seen offering less of a return than trucks and SUVs.
According to Dow Jones, Chrysler acknowledged it could be hurt this year by a reduction in average transaction prices on a year-on-year basis as the high discounts and rebates and a move away from high-profit SUVs in the US market lower transaction prices.
