Chrysler Cancels Plan for SUV to Invest in Compact, Press Says

(Bloomberg) — Chrysler LLC, the automaker owned by private-equity firm Cerberus Capital Management LP, 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 Motor Co., Co-President James Press said in an interview today.


The move reflects Chrysler’s goals of reducing the number of models it sells and eliminating vehicles that compete with each another. Abandoning the SUV will also leave Auburn Hills, Michigan-based 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.”