Chrysler Group President and CEO Dieter Zetsche Says Company's 1998 Merger Improved Long-Term Viability

- Merger lays foundation for Chrysler Group's global transformation - Zetsche confirms Brampton (Ontario) Assembly Plant will build left- and right-hand drive versions of the Chrysler 300C and SRT-8 vehicles for sale outside of North America beginning in 2006 - Announces all Jeep(R) Liberty Diesels will be fueled by B5 biodiesel fuel, reducing the vehicle's petroleum use by an additional 5 percent - Innovative Canadian partnerships have paved the way to meet unique industry challenges

CALGARY, Alberta, Sept. 10 -- Chrysler Group President and CEO Dieter Zetsche told a group of international business leaders at the Spruce Meadows "Changing Fortunes" BUSINESS ROUND TABLE today that the Company is thriving in a very competitive global marketplace as a result of its 1998 merger with Daimler-Benz, transforming its North American operations and going back on the offensive with nine new products launched this year, including the Canadian-built Chrysler 300C.

"The North American auto market is contested like no other market in the world," Zetsche told the group of 170 CEOs, presidents and corporate executives. "Just about any large shopping mall parking lot tells the story. Focusing on how to adapt and compete in the new order is the key to survival."

He credited the six-year-old merger for laying the foundation of the Chrysler Group's global transformation, but noted that significant improvements in productivity, quality and costs had to be achieved first in North America. As a result of the sharp focus on these initiatives, Zetsche said the Chrysler Group has made significant improvements and is working to close the gap between the best automotive companies in the world. The goal, he told the audience, is to equal or exceed them in key areas by 2007.

While much work over the past three years was focused on surviving, Zetsche said, "We are now going on the offensive and striking back in the best way you can, namely with hot products."

He said that international demand for the Brampton, Ontario-built Chrysler 300C is outpacing supply by more than 30 percent this year and, with the addition of the Chrysler 300C Touring sports wagon, the 300C family of vehicles is giving the Company added strength in traditionally European- dominated segments.

He added that the 300C momentum will continue. "I can confirm today that in 2006 we will start to sell left- and right-hand drive versions of the Chrysler 300C and SRT-8, (the recently introduced higher performance version of 300C) outside of North America."

He said the Company was able to keep cost down while accelerating development of these rear-wheel/all-wheel drive vehicles by drawing on the engineering expertise within the DaimlerChrysler family.

"The Chrysler 300C and SRT-8 are tangible evidence of another important way in which the merger is paying off," Zetsche said.

Because of the strong portfolio of products, Zetsche said the Chrysler Group is "stepping up our international market initiatives." With vehicle sales in more than 125 countries, the Company plans to sell about 180,000 vehicles outside of North America in 2004. By 2007, the number of models available in markets outside of North America will more than double to approximately 18. And in that same period, the number of right-hand drive vehicles will double to more than a dozen.

Zetsche said that DaimlerChrysler Canada has an emerging role to play in the Company's global "mindset" and product offensive as "a market proving ground."

"In terms of buying patterns, gas taxes, consumer tastes and market segmentation, the Canadian market much more reflects that of Europe and other international markets than does the U.S. market," Zetsche said. "This is one reason that we'll closely be tracking demands and consumer response to our 2005 Jeep(R) Liberty Diesel, available with 2.8L common-rail turbo diesel. If we're successful, we could expand our diesel offerings to the Jeep line or into other vehicles available in Canada in the next couple of years."

Zetsche said that clean diesel technology plays an important role in reducing oil consumption and carbon dioxide emissions. The Jeep Liberty Diesel meets those two objectives by cutting C02 emissions by about 20 percent and achieving fuel economy gains of about 30 percent over the 3.7 liter V-6.

"To further maximize our diesel's potential, we will also encourage the use of biodiesel in our vehicles," Zetsche added. "Each Jeep Liberty Diesel coming off our assembly line will be fueled by B5 biodiesel from soy beans. B5 biodiesel reduces Liberty Diesel's petroleum use by an additional five percent.

"There's great untapped potential for biodiesel, but we'll need standards that will ensure consistency in the quality of biodiesel fuels," Zetsche said.

He added that another important strategy the Company is employing is to adapt to global competition including forming innovative partnerships to find new solutions for the challenges that confront the industry. He referred to two Canadian partnerships as examples of how industry, academia and government can work together in order to remain competitive.

The first, the Automotive Research and Development Centre (ARDC), is a joint initiative of DaimlerChrysler Canada and the University of Windsor, which opened in 1996. ARDC was the first industry-academia partnership of its kind in North America dedicated to automotive research, development and education. ARDC does critical research and development work in the areas of automotive coatings and vehicle safety for DaimlerChrysler.

The second is with the Canadian Automotive Partnership Council (CAP-C), a joint initiative of government, labor, industry and academia to help formulate a comprehensive auto industry policy for Canada.

"I strongly believe that developing innovative, progressive and constructive partnerships between academia, government and industry will be increasingly necessary to remain competitive in the global marketplace," Zetsche said.