US carmakers won't have a majority at home

Southfield, Michigan: Chrysler, General Motors and Ford Motor can't keep overseas-based carmakers from encroaching on US sales and will soon hold less than half the share of their home market, Chrysler's president said.

"The domestic auto companies are not going to have a majority, they are not; they will be a minority," James Press of Auburn Hills, Michigan-based Chrysler, said Friday in a New York forum sponsored by the State University of New York's Levin Institute.

Press's comments underscore challenges confronting US automakers as they grapple with surging gasoline prices, stricter environmental regulations and increased competition from overseas companies such as Hyundai Motor.

US auto-makers accounted for 51.1 per cent of US sales in 2007, down from 53.7 per cent a year earlier and more than 70 per cent a decade ago.

Much of that share has been taken by Japan's Toyota Motor Corp., whose North American operations were led by Press until September. Press said Chrysler can be successful as a niche player in the global market, first by exporting vehicles from the US and later by building vehicles in other markets.

"We don't have to chase" to sell 10 million cars around the world, said Press. "What we can do is be the best little car company in America."

Since August, when Cerberus Capital Management LP purchased the automaker from the former DaimlerChrysler AG, Chrysler has discontinued four models, announced 12,100 job cuts and laid out a plan to combine dealerships and further pare its model lineup.

Targeting buyers

Press said the company is aiming its Chrysler vehicles toward upscale, luxury buyers, and trying to make Dodge the high- volume full-line brand. Jeep will be the niche specialty brand.

Chrysler has performed well after the sale, Press said. The company has been profitable since the acquisition and has a budget of $3 billion annually for capital expenses, he said.

On February 27, Daimler AG reported that Chrysler lost $2.76 billion from August 4 through September 30. Cerberus said Chrysler had operating profits in the two-month span, and attributed the disagreement to accounting differences.

Press said he speaks with Cerberus Chief Executive Officer Stephen Feinberg several times a month, and that the New York- based private-equity firm has no set exit plan for Chrysler.