Chrysler may expand business in 'high growth' markets

By John D. Stoll

Last Update: 5:44 AM ET Mar 7, 2007

GENEVA (MarketWatch) -- Chrysler Group's international sales chief Thomas Hausch said Tuesday that DaimlerChrysler AG's (DCX :

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DCX68.61, +2.81, +4.3% ) U.S. unit is looking at expanding into several "high-growth regions" in an attempt to outpace its current sales goal of doubling international sales by 2011.

Hausch, speaking during an interview following a Geneva auto show press conference, said the company is looking at several emerging markets, including Russia, and countries in Latin America and Southeast Asia. The company sold 207,000 vehicles in non-North American markets in 2006 and Chrysler has said it wants to double that result by 2011. Hausch says the company is "now at this point looking at an even bigger increase," but he declined to give details.

The executive did not rule out installing manufacturing capacity in high-growth regions. A December article published by WardsAuto.com said that Chrysler Chief Executive Tom LaSorda is looking at a potential expansion of the manufacturing footprint into Russia. Hausch did not rule such a move out, but did not elaborate on details.

"We're looking at places in the whole world," Hausch said, noting that the only countries off Chrysler's potential wish list are countries where U.S. companies are not allowed to sell cars.

Chrysler, in the midst of a restructuring after posting a $1.5 billion operating loss in 2006, relies heavily on exporting vehicles from North America and Austria for sale in international markets. The company also has a growing manufacturing base in China.

Hausch said the company may pursue more partnerships in emerging markets that could follow in the footsteps of its recently forged pact with China's Chery Automobile. Earlier on Tuesday, DaimlerChrysler Chief Executive Dieter Zetsche said the auto maker will utilize the Chery deal - which carries a 25-year exclusivity clause - to build profitable passenger cars for a variety of markets, including North America. Importantly, the Chery agreement opens important inroads to the Chinese market, where Chrysler sales are growing.

Chrysler's international ambitions come as the struggling U.S. auto maker is under the cloud created by its parent company's Feb. 14 move to disclose it is considering strategic alternatives for Chrysler, including a possible sale. Even as Chrysler posted a steep loss in 2006, its international operations were profitable.

Hausch said that concerns have been expressed by some non-North American buyers and dealers related to the future of Chrysler. However, he said sales continue to grow under his watch and he has no concrete data to illustrate the impact of DaimlerChrysler's disclosure that it is mulling a sale.