FRANKFURT - DaimlerChrysler executives are finalizing a small-car strategy that could include acquiring another automaker.
At the Frankfurt auto show, the company dropped a hint of what's to come for Europe with the Chrysler Java concept car. Officials said they plan to add at least two vehicles to the mix, cars the size of the Opel Astra and Corsa.
But DaimlerChrysler has not given up the option of buying a company that already produces smaller vehicles, said Robert Eaton, DaimlerChrysler chairman. 'We are working on a small-car strategy for the entire company,' Eaton said in an interview at the show. 'That includes the Chrysler brand, Smart and A class down. We are 90 percent there.'
DaimlerChrysler is specifically interested in small cars ranging in size from the Volkswagen Golf, which is 164 inches long, down to the Opel Corsa, which is 146.5 inches long, and powered by four-cylinder engines with displacements up to 1.8 liters. By comparison, the Neon is 174.4 inches long.
Although the new cars likely would be branded Chrysler in Europe, they also may wear the badges of other divisions in other markets, said Dieter Zetsche, DaimlerChrysler board member for sales and marketing.
`CLOSE TO A DECISION'
One option would be to brand them as Smart models.
Mercedes-Benz, however, will not introduce a car positioned below the A class, said Juergen Hubbert, head of that passenger car division. 'The next generation will be sold on the American market.'
Eaton would not say when the new vehicles will appear on the market. 'We are close to a decision, and when we decide, we will act quickly,' he said.
Eaton said that although DaimlerChrysler has decided to develop small cars on its own, it may buy another maker. 'Obviously it is an alternative,' said Eaton, citing an Italian, French, Japanese or Korean company as a possibility.
DaimlerChrysler has talked to several makers with small cars in their range, said Eaton. But there are currently no serious talks underway, he said.
Eaton would not say whether DaimlerChrysler had merger discussions with Fiat Auto of Italy or the PSA Group of France, which will likely provide the platform for two new Smart models.
NEEDS SMALL CARS
DaimlerChrysler needs smaller cars for the Chrysler brand in Europe to compete with the volume makers. Chrysler's smallest car in Europe, the Neon, has been a disappointment here because of its size and price. Even the redesigned Neon is as large as the competition's family cars.
The European small-car segment accounts for more than 50 percent of sales. The biggest sellers are vehicles such as the Astra, Ford Focus and Volkswagen Golf. The next most popular are smaller cars such as the Corsa, Ford Fiesta and Volkswagen Polo. It's a segment even Europe's luxury brands are aiming at, with newcomers like the Audi A2, an aluminum small car unveiled at the show.
The Java is aimed at that market. It has what DaimlerChrysler calls 'passenger priority' and has the same interior room as the Chrysler PT Cruiser, which is about 20 inches longer.
The Java also is a hatchback, the body style preferred in Europe, and has fold-down rear seats. Rear passengers sit higher than those in front. It is the first Chrysler-branded design study for Europe and was completed before the merger.
A 1.4-liter four-cylinder engine with 80 hp powers the Java, the same size as the engine Chrysler is jointly building with BMW AG in Brazil.
BIG ONES, TOO
DaimlerChrysler also is developing a top-of-the-line car, the Maybach. Hubbert said Maybach production will begin in October 2002 and that the car will be built in short- and long-wheelbase versions.
Hubbert said the production model will be more appealing than the first concept seen at the Tokyo show in October 1997.
The shorter Maybach will be 'a driver's car,' despite its size and luxury features, said Hubbert. The longer car is designed to be chauffeur-driven, he said.
Zetsche said not all Mercedes-Benz dealers will sell the Maybach; they will be chosen on a 'select basis.'