DUNDEE, Mich. -- The Chrysler group may ask its four-cylinder engine manufacturer to build more than 800,000 engines annually, says CEO Tom LaSorda.
DaimlerChrysler AG is a partner in the Global Engine Manufacturing Alliance, which will build 1.8-, 2.0- and 2.4-liter engines at five plants worldwide. Last month, the alliance began production at one of two plants here.
Chrysler will be the sole recipient of the Dundee engines for at least 24 months. One partner, Hyundai Motor Co., is not sourcing engines from the plant. Mitsubishi Motors Corp., the other partner, is reworking its product plans.
The plant now operating in Dundee will build 420,000 units annually.
A second plant in Dundee will begin operating next October. Chrysler plans to obtain 210,000 engines from the second plant. That is half the plant's capacity. But it may take more.
"We will study whether we need another 200,000," LaSorda said here last week during a press event at the first of the two engine plants.
The new engines will arrive in the 2007 Dodge Caliber, a Dodge Neon replacement. They will be used in 12 Chrysler group model lines worldwide. Last week, LaSorda confirmed the engines also would power two Jeeps, the Compass and Patriot, that the company has shown as concept vehicles.
Opting for more engines may be risky if the move leads to vehicle oversupply, says Jim Hall, vice president of industry analysis at AutoPacific Inc. "If there is a downside, it is that (Chrysler) doesn't own that part of the business," he says, referring to the small-vehicle market. "People lost track of the Neon."
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