Chrysler Group President Dieter Zetsche Says Companies Must Adapt And Transform to Survive in Global Automotive 'Jungle,SO Chrysler Will Intro 25 New Models

* Company's product blitz will lead to 25 new vehicles in the next 36 months * DaimlerChrysler global resources key in transforming Chrysler Group

BOSTON, Oct. 1 -- Dieter Zetsche, President and Chief Executive Officer of the Chrysler Group, today likened the highly competitive global automotive industry to a "jungle," in a speech at the prestigious Chief Executives Club of Boston, sponsored by Boston College. Zetsche stressed to the more than 300 business leaders and corporate executives in attendance that the Chrysler Group is rapidly transforming itself, a prerequisite for survival in that environment.

"This jungle is an extremely fierce and competitive place," said Zetsche. "The U.S. market is under attack from all sides and in every segment -- and by very competent competitors."

In order to survive in today's business jungle, Zetsche outlined the company's principle focus on future product, including an unprecedented plan to launch 25 new vehicles over the next 36 months. "In this business it still comes down to satisfying your customers by building great products. It always will," said Zetsche. "Our next generation of cars, trucks and sport-utility vehicles are the products that will shape our future."

The Chrysler Group product offensive actually began this year with the Chrysler Pacifica, the Chrysler Crossfire and the new Dodge Durango, which will go on sale next month. He added that by the end of 2004, the Chrysler Group will launch nine new products, making it the most vehicles ever launched by any manufacturer in the U.S. in a one-year period.

Zetsche defined the challenge of the current overcapacity situation in the U.S. market. "Total annual demand for vehicles in North America is at approximately 19 million, with more than 100 auto assembly plants producing a combined volume of 20 million vehicles yearly, and with another two million more vehicles imported into the market every year," he said. "The result is more vehicles chasing buyers than ever before." The only way a company can win, over the long-term, according to Zetsche, is by matching customer needs with exciting concepts.

While product is the life-blood of a vehicle manufacturer, Zetsche also spoke of the critical need to balance the creative with a strong bottom line. "Global competition, an oversaturated market and heavy incentive spending put tremendous pressure on margins," he said. "If the market is reducing your top line, you've got to work harder to recover that money from your cost base."

Regardless of the heightened state of competitiveness in the automotive industry, Zetsche is confident that the Chrysler Group is well on its way to transforming itself into a stronger competitor, to a large extent because of the global resources it can draw on from within the worldwide DaimlerChrysler organization.

Zetsche pointed to current examples of how the DaimlerChrysler global model benefits the Chrysler Group. "We're sharing expertise and maximizing capital investment in engine plants, namely, in the form of our new Global Engine Alliance joint venture with Hyundai and Mitsubishi," Zetsche said.

The Global Engine Alliance will produce a family of four-cylinder engines for use in future Chrysler, Mitsubishi and Hyundai vehicles. The jointly- designed engines will meet tough customer expectations for performance and fuel-efficiency, as well as stringent future emissions worldwide.

The Chrysler Group also is leveraging the company's global assets in its new generation of large cars. "These vehicles, including the Dodge Magnum and Chrysler 300C, will be the first rear-wheel-drive sedans from Chrysler in more than two decades," he added.

"By drawing on the more than 100 years of experience and expertise from our colleagues at Mercedes-Benz, this new generation of Chrysler Group vehicles will come with state-of-the-art rear-wheel-drive systems right out of the box," he continued.

Zetsche also cited Chrysler Group's commitment to achieving the highest levels of productivity and quality in order to compete with the best in the world.

In 2003, Chrysler Group got off to a good start toward that goal by earning recognition as the most improved automaker in the annual Harbour Report, the industry's benchmark study for plant productivity in the United States. Every Chrysler Group plant improved in its year-over-year ratings, earning the company an 8.3 percent overall improvement rating.

Zetsche also underscored the company's dedication to escalating product quality to all-time high levels over the next four years. "Our new vehicle warranty costs -- the true measure of actual quality for our customers -- were down 20 percent last year and have been cut in half since 1996.

"Our goal is to continue this pace until we are equal to or better than the best in the industry in productivity and quality, by the year 2007," said Zetsche.