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Tuesday, October 17, 2006

Chrysler Say It Can Do Better (DCX)(F)(GM)(TM)

A day after saying that it has too much inventory in the US and that Q4 numbers may suffer accordingly, Chrysler announced that it could pick up a share point next year. The figure Chrysler gave was actually nine-tenths of a percent, but who is counting?

The boast is based on new models coming out in the Chysler and Jeep model lines. Chrysler's share of the US market is now 12.8% down from 13.6% last year, according to Autodata.

Big talk. The question is, who loses share? It will probably not be Toyota or Honda, Each seem to gain share in the US every month.

That probably leaves Ford and GM. Ford may be the most logical candidate. It has already said that its US market share may drop from its current 17% to as low as 14% as it retools it model line and moves it away from relying heavily on pick-ups and SUVs.

But, Chrysler's public statement that it can gain share is a slap at both GM and Ford. Chrysler is the smallest of the Big Three. It does have the advantage of being part of a larger parent, DaimlerChrysler, but if it can gain share, why can't GM and Ford?

One of the possibilities is that, if all three US car makers can revamp their product lines to include more fuel-efficient vehicles then all of them might gain, or at least maintain, share in the US. Toyota has had recall and quality problems with its US cars, so its position as having the "best built" cars by be in jeapordy.

All three US car makers gaining share in their home market. It would be novel.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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