DETROIT (Bloomberg) -- Chrysler Group LLC's biggest U.S. investment in the year following its June 2009 bankruptcy exit is about to show up under more of its hoods: transmissions with additional gears to improve performance and boost fuel economy.
Eight-speed transmissions, more common in luxury vehicles made by the likes of BMW AG and Volkswagen AG's Audi, will spread throughout Chrysler's lineup beginning late this year, said Mircea Gradu, vice president of transmission powertrain and driveline engineering.
The company will introduce the industry's first nine-speed transmissions by the first half of 2013, he said.
"I'm convinced that, sooner or later, others will come up with similar solutions," Gradu said. "Hopefully, the time will be as long as possible until they catch up with the technology."
While rivals tout hybrid cars, plug-in hybrids and pure electrics, CEO Sergio Marchionne is betting he can meet regulatory requirements primarily by improving traditional gasoline engines with the better transmissions.
The strategy takes less investment than developing a hybrid and has already helped boost sales of cars such as the Chrysler 300.
The eight- and nine-speed transmissions will help Chrysler meet stricter standards aimed at curbing emissions and raising efficiency. President Barack Obama has proposed U.S. rules requiring automakers to double their corporate average fuel economy, known as CAFE, to 54.5 miles per gallon by 2025.
Most automakers' game plans are to use some gasoline-electric hybrids, a modest number of electric vehicles and a substantial amount of improvement in traditional internal- combustion engines, said Alan Baum, principal of auto-industry forecaster Baum & Associates in West Bloomfield, Mich.
Chrysler hasn't invested heavily in hybrids, and the only electric vehicle it has announced is an electric Fiat 500 subcompact, primarily to comply with California "zero-emission vehicle" mandates.
"Looking at how the various automakers are going to satisfy CAFE, for most of the automakers you can come up with a pretty reasonable path to get there," Baum said. "And then you look at Chrysler."
For Chrysler to have a chance of staying in compliance through 2025 without dramatically changing their engines, "the answer is the transmissions" for now, Baum said.
"They're getting tremendous differentiation from their old product," said Baum.