DaimlerChrysler's Chrysler Group doesn't intend to cede the growing hybrid car market to rivals such as Ford Motor Co. and will offer front-wheel-drive hybrid vehicles in the U.S. perhaps as early as 2006, group Chief Executive Dieter Zetsche said in an interview, according to an article in the Los Angeles Times Aug. 19. Zetsche's remarks came during a preview of the 2005 Jeep Grand Cherokee and the new diesel-powered Jeep Liberty sport/utility vehicle in Santa Barbara. Chrysler, based in Auburn Hills, Mich., has been emphasizing diesel vehicles rather than hybrids in the U.S. to bolster its fuel-efficiency ratings. Hybrids combine gasoline engines and electric motors to improve performance while reducing gas consumption. Zetsche would not identify the vehicles Chrysler might introduce as hybrids, but the popular PT Cruiser and Dodge and Chrysler minivans have been viewed as likely candidates. He did say that rather than develop its own hybrid systems from scratch, DaimlerChrysler probably will license the technology from another manufacturer. Toyota Motor Corp., which developed the first retail hybrid with the 1998 Prius, has said it will sell its system to all comers and has licensed its hybrid technology to Nissan Motor Co. for a 2005 Altima hybrid sedan. A Toyota spokesman has said that he wasn't aware of any deal with Chrysler. In addition to Toyota, Honda Motor Co. sells hybrids in the U.S., and Ford will begin selling a hybrid version of its Escape SUV this year. Chrysler has developed a so-called mild hybrid version of its heavy-duty Dodge Ram pickup, using a diesel engine and an electric motor that will provide additional power in certain driving situations. The Ram hybrid's electrical system also can be used as an electric generator when the vehicle is parked. But Dodge plans to sell only a few hundred a year, mainly to government fleets and construction companies. By emphasizing diesel technology, which is popular in Europe, Chrysler seemed to be giving up on the critical California and Eastern Seaboard markets, where diesel passenger vehicles can't be sold because of strict air pollution regulations. Diesel fuel produces more harmful particulate matter — soot and other solid emissions — than does gasoline. But diesels are more fuel-efficient, thus producing less carbon dioxide than gasoline. Carbon dioxide is a so-called greenhouse gas that contributes to global warming. The diesel Liberty SUV, for example, will get about 25 percent better fuel economy than the gasoline version — 22 miles per gallon in the city and 27 mpg on the highway, according to company estimates. But Chrysler can sell it only in the 43 states that follow the less stringent federal emissions standards.

Originally posted on Fleet Financials