Chrysler Group Product Offensive to Target Passenger Car Market

* Two-thirds of New or Refreshed Models in Next Three Years will be Car-Based * Chrysler Group President Outlines Vision Based on Product Leadership * Goal to Increase Volume by One Million over 10 Years

TRAVERSE CITY, Mich., Aug. 7 -- Dieter Zetsche, President and Chief Executive Officer of Chrysler Group, declared today that a cornerstone of the company's product offensive in the next three years will be aimed directly at the passenger car market in North America. Speaking at the 2002 Management Briefing Seminars at the Grand Traverse Resort, Zetsche said that "two-thirds of the 21 new and refreshed vehicles that we will introduce (in model years 2003-5) will be car-based." In recent years, Chrysler Group has been the most dependent among the Detroit automakers on the truck market, with nearly 70 percent of its total sales based on sport- utility vehicles, minivans and pickup trucks. That will change in the future, said Zetsche. Calling Chrysler "a great American auto company with a storied past," he said that the company would "lead productive change in our industry" by parlaying its strengths in design, segment-definition and product innovation to retake some of the ground lost by American makers in the last 15 years. Zetsche also outlined his company's overall strategy for the future, built around a vision to differentiate itself from the competition. "We intend to create our own unique proposition, one that will profitably grow our volumes, give us equal standing with the best in our business, and essentially create a new Chrysler." Zetsche recently set a goal to add one million units a year to Chrysler Group's annual worldwide volume by the beginning of the next decade. Zetsche said that automakers have three ways to build a unique proposition: through operational efficiency, unparalleled customer experience or product leadership. "Every company needs to be competitive in all three areas to succeed," he said, "but no single company can really differentiate itself in all three. Inevitably, there are trade-offs that place that noble goal out of the reach of any one company -- no matter how large, how rich or how creative it may be." Chrysler Group, Zetsche said, will focus on product leadership, because it already has an established reputation for many supporting traits of that claim. "There is no question, for example, that industry-leading design has long been one of our strengths," said Zetsche. "You might even call it 'the DNA of Chrysler.'" The Dodge, Jeep(R) and Chrysler brands have also been known for building segment-busting or segment-defining products, such as the Chrysler PT Cruiser. While building off that pedigree, Zetsche said that Chrysler Group will also seek to take advantage of the newly gained heritage that the merged DaimlerChrysler family now provides. Parts of that company -- notably Mercedes-Benz -- have a leading reputation for product innovation, Zetsche added. "Certainly one of the most powerful of our new tools is our ability to share technology with our global DaimlerChrysler partners," said Zetsche. "The technology is flowing both ways." Several engines, transmissions, and even an ABS brake system derived from Mercedes products will find their way into Chrysler vehicles, while Chrysler technological contributions in areas such as cost-efficient emissions controls, occupant sensing technology and computer-aided engineering will be adapted company-wide. He pointed to the 2003 Chrysler Crossfire, which will enter the market next year, as a vehicle that "embodies the new product formula." "We call it the 'sports coupe of the future,'" he said, "because its combination of creative American design and solid German technology symbolizes the potential of DaimlerChrysler in an exciting new production vehicle. "The Crossfire was designed in Auburn Hills -- and it will be built in Germany. That's why we're saying it was conceived 'where Route 66 meets the Autobahn' -- the symbolic junction of American and German automotive engineering."