AUBURN HILLS, Mich. — Chrysler has canceled plans for a new sport utility vehicle and is instead investing in a compact car.
The company won’t build a Chrysler-brand version of the Dodge Journey SUV in 2009 and will use the savings to help pay for designing a compact car to be manufactured by Nissan, co-president James Press said Monday.
The move reflects a push toward more fuel-efficient vehicles and Chrysler’s goal of eliminating overlap between its brands.
Abandoning the SUV will also leave Chrysler with fewer new or revamped products to introduce in 2009, putting the automaker at risk for further declines in market share, analysts said.
“Resources have been deployed to basically support our entry” into the small-car segment rather than building two versions of the Journey, Press said. “It’s a segment we are not competing in now.”
Press said in March the company needed to cut the number of SUVs it offers in half, from 11. Chrysler gets about 70 percent of its sales from light trucks, which include SUVs.
The automaker has cut four models. Chrysler’s plan will help pare costs and may broaden the customer base once vehicles under development get to market, analysts said.
In the meantime, cutting the Chrysler-brand version of the Journey will leave the company with almost no new or redesigned vehicles to promote at dealerships in 2009, said Erich Merkle, an auto analyst at IRN Inc. in Grand Rapids, Mich.
Chrysler’s market share through April was 12.5 percent, down from 14 percent a year earlier. U.S. sales have fallen 18 percent this year, in part because of the model cuts and reduced sales to rental-car companies.
The company will discontinue the Jeep Commander SUV next year, according to people familiar with the company’s plans.
The automaker is planning to make upgrades to its Sebring sedan in 2009, the Detroit Free Press reported in April, citing an interview with Frank Klegon, product- development chief.
