Chrysler commits to new hybrids

By Kevin Krolicki

CHELSEA, Michigan (Reuters) - Chrysler Group said on Thursday it would roll out new hybrid vehicles, streamline its cars and trucks and introduce more diesel engines in a bid to improve fuel economy in the face of high petrol prices and tougher federal regulations.

Chrysler, which is being acquired by Cerberus Capital Management in a $7.4 billion (3.7 billion pound) deal, has trailed other major, competing automakers in key indicators of fuel economy.

"Chrysler Group is focused directly on improving fuel efficiency across our vehicle lineup," product development chief Frank Klegon said in a statement.

"We don't think there is one silver bullet. We have to fight these battles on many fronts," he said.

Klegon said Chrysler projected that hybrid and diesel alternatives to traditional gasoline engines could grow to represent 30 percent of the U.S. light vehicle market, a roughly tenfold increase from current levels.

U.S. automakers have seen their market share eroded in recent years, a trend many analysts and executives attribute in part to the reputation Japanese automakers have established for better fuel economy.

Like its rivals, Chrysler is also facing the prospect of 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 -- or CAFE standard -- is 27.5 miles per gallon for cars and 22.5 for light trucks.