Chrysler Group President Dieter Zetsche Says 'Tidal Wave of New Product' and Upswing in U.S. Economy Create Opportunities for Dealers and Manufacturers in 2004

* Unprecedented volume of new product and favorable economic conditions create potential for 2004 U.S. auto sales of more than 17 million units

* Chrysler Group implements more stringent quality system tracking "conditions per thousand"

* Zetsche hails franchise dealer system as stronger than ever and well-positioned to keep pace in complex, competitive marketplace

LAS VEGAS, Jan. 31 -- Dieter Zetsche, President and Chief Executive Officer of the Chrysler Group, announced the automobile industry's return to great products and stressed the need for cooperation, mutual success and respect between automakers and dealers in 2004, a year that Zetsche described as the year of the "product wars." Zetsche delivered this message today in a keynote address at the annual National Automobile Dealers Association (NADA) convention.

"With so many new products coming to your showrooms, the time may have finally come for us to put less emphasis on selling 'the deal', and more emphasis on selling the product," Zetsche told the dealer group. "This is good news for the industry, good news for customers and good news for all of you."

He added, "Given the tidal wave of new product heading for dealer showrooms and favorable economic conditions, we see U.S. auto sales for 2004 heading north of seventeen million units -- with positive growth for the first time in four years."

Zetsche asserted there is no better system to sell and service vehicles than the franchise dealer model. "If I were invited back to this conference twenty-five years from now, I'm sure I'd find the franchise dealer system alive and well, evolving and adapting, and as strong as ever -- probably stronger still.

"At the Chrysler Group, we've come to view our dealers much as we do our large financial investors on Wall Street," Zetsche added. "We recognize the investment that our dealers have in our franchises, which exist solely to sell and service our product."

Zetsche believes that the vehicles that will lead the product wars and therefore truly resonate with customers will be those scoring the highest in six categories including styling, meaningful innovation, safety, environment, quality and value.

Specifically on the topic of quality, Zetsche said, "We're all well aware of the quality gap that has existed far too long between domestic automakers and the best of the Japanese automakers."

He added that the Chrysler Group is well on its way to eliminating the gap, in part by creating tougher, more exacting standards and internal measurements.

In fact, the company is re-calibrating the measurement of "things gone wrong" by implementing a new quality tracking system that evaluates "conditions per thousand" instead of "conditions per hundred." Benchmarking quality gains will also rely on warranty cost reductions. Zetsche asserted that the Chrysler Group is on target to close the quality gap by 2007.

Zetsche concluded his address by underscoring the unique market climate and wealth of new products and the resulting opportunities for success. "There's no better time for us all to get our hearts, minds and energy back into the great business of building, selling and servicing cars and trucks," he said.