CHELSEA, MI — Chrysler Group said it would roll out new hybrid vehicles, streamline its cars and trucks, and introduce more diesel engines in an effort to improve fuel economy in the face of high petrol prices and tougher federal regulations, according to Reuters.

Product Development Chief Frank Klegon said that Chrysler projects its hybrid and diesel alternatives to traditional gasoline engines could grow to represent 30 percent of the U.S. light-vehicle market.

Chrysler, and other manufacturers, have tougher federal fuel economy standards under a pending bill in the U.S. Senate that would mandate fleet-wide average of 35 miles per gallon for cars and light trucks by 2020. The current corporate average fuel economy is 27.5 mpg for cars and 22.5 for light trucks.

Klegon said Chrysler would introduce a new “mild hybrid” vehicle equipped with a lower-cost battery pack designed to power the vehicle at stops. In addition, Chrysler plans to use hybrid technology developed jointly with General Motors and BMW in vehicles beyond the two hybrid SUVs already announced it would introduce next year. A two-mode hybrid system, which can use an onboard electric motor to generate additional power as needed, promised a 25-percent gain in overall fuel economy, according to Reuters.

Chrysler will also:

  • Offer a clean-burning diesel version of the Jeep Grand Cherokee.
  • Consider offering a four-cylinder diesel engine in the U.S. market, a common passenger car engine configuration in Europe, that could offer fuel economy gains of up to 30 percent over gasoline engines.
  • Invest $3 billion in new plants in Wisconsin, Michigan, Indiana, and Mexico to produce a family of more fuel-efficient V-6 engines and components. The family of “Phoenix” engines, which will be available for 2010 models, would produce fuel efficiency gains of between six and eight percent.
  • Reduce vehicle weight and improving aerodynamics, resulting in boosting its fleet-wide fuel economy at least another five percent.
  • Originally posted on Fleet Financials