Chrysler to Cut Back Models, Dealerships

DETROIT, Feb 7, 2008; Reuters reported that U.S. automaker Chrysler LLC plans to cut its product lineup by around a half and dramatically shrink its dealership network as part of plans to sell its three brands under one roof, the Wall Street Journal reported on Friday.

The plan to cut the struggling No. 3 automaker's product line of around 30 different trucks, cars and sports utility vehicles across the Chrysler, Dodge and Jeep brands to 15 or more within a few years is part of a drive to cut costs and create a leaner, more profitable company, the paper said.

Representatives of Chrysler had no comment on the Wall Street Journal report.

Chrysler is owned by private equity company Cerberus Capital Management, which bought an 80 percent stake in the company from Daimler AG (DAIGn.DE: Quote, Profile, Research) last August. Since appointing former Home Depot Inc Chief Executive Robert Nardelli to run the company, Cerberus has been expected to shake up established practices in Detroit.

The new plan is aimed at making a significant reduction in the about 3,600 dealerships that Chrysler has to a much smaller number that would sell all three brands, the Wall Street Journal reported.

The project will where possible merge dealerships, with larger dealerships possibly being offered loans by Chrysler and Cerberus to buy out smaller dealers.

In the past few years, Chrysler has sought to encourage dealers to merge with or buy out other dealerships and stores carrying all three Chrysler brands, the paper said.

Reporting for Reuters by Nick Carey; Editing by Paul Bolding