Police caught 520 speeding motorists in just three hours during checks at roadworks on one of the country's most dangerous roads.

The drivers were caught by a mobile speed camera set up on the A45 near Rushden, Northamptonshire, where work is taking place to install a new central reservation barrier.

A temporary 40mph speed limit has been imposed, in place of the usual 70mph limit, but officers clocked hundreds of motorists breaking the restrictions.

"The A45 at Rushden, between the Irchester turn and Ditchford Lane, has recently been designated as one of the county's 50 most hazardous routes," said a Northamptonshire Police spokesman.

"Six people were killed or seriously injured on this stretch of road between January 2000 and November 2002."

In two hours of monitoring, police caught 342 drivers speeding on the route.

The spokesman said 178 speeding motorists were caught in one hour on Sunday.

The motorists will be sent fixed penalty notices, which include a £60 fine and impose three penalty points, or a court summons.

Geoff Chatfield, Highways Agency project manager, said: "The 40mph limit is considered essential to protect the workforce and road users whilst the safety barriers are incomplete."

Work on the route began on April 1 and is expected to continue for a further three weeks.

"There are no plans right now to share manufacturing capacity. But the potential is there," says Chrysler group COO Wolfgang Bernhard. "It will be very simple for us to get a Mitsubishi into one of our plants or the other way around. It is a much more flexible manufacturing system, and that is essential for our future."

Under the strategy, Chrysler and Mitsubishi Motors Corp. each will retain distinct "home base" assembly plants. But the two companies will be able to shift production among plants building small and mid-sized vehicles derived from the redesigned Mitsubishi Lancer platform.

The ability to shift products between plants allows automakers to build what customers are buying, manufacturing experts say. This can cut investments in extra plants and increase revenue by boosting sales.

The Chrysler group, General Motors and Ford Motor Co. lag Japanese automakers in such manufacturing flexibility.

Product development at Chrysler and Mitsubishi is closely linked. The companies chose Mitsubishi's redesigned Lancer platform for the next-generation Chrysler Sebring and PT Cruiser, the Dodge Stratus and Neon and the Mitsubishi Lancer. Other unspecified variants will be developed for both companies.

The redesigned Neon is expected to bow in 2005, followed a year later by the Sebring and Stratus. The redesigned PT Cruiser will debut in 2005 or 2006. Under a contract agreement, Mitsubishi Motor Manufacturing of America Inc. assembles the Chrysler Sebring coupe and Dodge Stratus coupe at its plant in Normal, Ill. But the Chrysler group does not build any Mitsubishi vehicles. DaimlerChrysler owns a 37 percent stake in Mitsubishi Motors.

When the new generation of small and mid-sized products bows, each Chrysler and Mitsubishi vehicle will have a "home base," a plant assembling products specific to one company, Bernhard says. "Our small and medium (vehicles) get a home base," he says. "Mitsubishi will have a home base. Some of it has got to be in Japan. Some of it has got to be here."

But if demand for a vehicle spikes and capacity exists, the automakers can help each other, Bernhard says.

"If we have some space left, we can offer capacity between small and medium (vehicles) within our company or with Mitsubishi," he says. "We can say, 'Hey guys, you need more of that car and that car. We can do it.' "

The costs and logistics of such flexibility are manageable, says Michael Flynn, director of the Office for the Study of Automotive Transportation in Ann Arbor, Mich. And the advantages are sizable.

"In today's market with the competitive climate it is especially valuable," Flynn says. "You can meet market demand without a lot of capital investment if you have a particularly popular vehicle. And a year or two later when a product is no longer hot, you are not stuck with a plant on your hands.

"The ability to run plants at higher operating rates and avoid capital investment is very important," Flynn says. "No one wants to be investing in new plants."

Says Bernhard: "If you find out your customer is crazy about a certain vehicle and you have plant capacity available, that is also revenue, not only savings. And (revenue) is more important in the long run."

It is unclear which Chrysler group plants would be most likely to absorb additional units. The Chrysler group will not elaborate on its production strategy and plant loading plans, says Mary Beth Halprin, Chrysler group spokeswoman.

For example, the automaker's underused assembly plant in Belvidere, Ill., which builds the Dodge Neon, might be a candidate for sharing.

Flexible manufacturing also will be a boon to Mitsubishi Motors, which needs added capacity in North America.

"Any time you can add flexibility to your system, you are better utilizing your fixed costs," says Michael Robinet, vice president of global forecast services at CSM Worldwide in Farmington Hills, Mich. "The Japanese show this on a daily basis."

To Arrive in Chrysler Dealerships By This Summer
Auburn Hills, Mich. ,
Mar 18, 2003

America's classic Route 66 will merge with Germany's legendary Autobahn this summer when the all-new 2004 Chrysler Crossfire begins to arrive in showrooms. The Chrysler Group announced pricing today for its all-new head-turning sports coupe.

Chrysler will offer Crossfire with two transmission options, a standard six-speed manual or optional five-speed automatic with AutoStick®. The Manufacturer's Suggested Retail Price (MSRP) for the six-speed manual version is $34,495. The MSRP for the five-speed automatic with AutoStick is $35,570. Both prices include an $875 destination charge.

With the exception of transmission and tire options, Chrysler Crossfire comes fully-equipped with standard premium amenities including heated leather seats, power windows, speed control, dual-zone temperature control, customized Crossfire luggage, four-wheel anti-lock brakes with brake assist, Electronic Stability Program (ESP), all-speed traction control, tire pressure monitoring system, and Chrysler's 7/70 powertrain warranty.

"With stunning American design and proven German engineering, Chrysler Crossfire is the ultimate expression of the Chrysler brand," said Tom Marinelli, Vice President, Chrysler Marketing, DaimlerChrysler. "Crossfire effectively establishes Chrysler as a premium brand, a brand that offers vehicles that are both aspirational and attainable. Without question, Crossfire will attract entirely new customers into our dealerships, including import-intenders."

The 2004 Chrysler Crossfire is a low-slung, two-seat sports coupe with a sculptured appearance. Under its hood is a 3.2-liter 90-degree V-6, 18-valve SOHC engine. Crossfire was developed in just 24 months after a concept version was revealed at the 2001 North American International Auto Show (NAIAS) in Detroit. A production version was unveiled one year later at the 2002 Greater Los Angeles Auto Show.

With the introduction of the 2004 Chrysler Pacifica and Crossfire, the Chrysler brand continues to build momentum. Chrysler brand sales have nearly quadrupled to 481,000 units in 2002 from 130,542 units in 1991.

While much has been made of the rise and fall of the dot-coms, automakers continue to invest more every year in the medium.

According to Competitive Media Reporting in New York, automakers spent $110.7 million on Internet marketing programs in 2002. The number may seem like only a small share of the $8.6 billion automakers pumped into their ad budgets in 2002, but it represents the seventh consecutive spike in Internet spending year-to-year since 1996, when total Internet spending hovered just above $10 million.

General Motors led the spree in 2002, increasing its budget 5.5 percent to $30.5 million, mostly concentrating its funds on portals, such as Yahoo!, and broadly targeted Web sites such as ESPN.com and the college-minded CollegeClub.com.

Toyota, Ford boost spending

Toyota Motor Sales U.S.A. Inc. ranked second, bumping its budget 53.8 percent to $22.8 million. Ford Motor Co. also increased its year-to-year spending, raising it 54.5 percent to $22.5 million.

The Internet spending of the industry's three biggest budgets reflects much of the trend in the industry, with automakers putting the bulk of their money on sites such as MSN.com and kbb.com, which get a lot of visitors and direct potential consumers to other sites, including automotive ones.

Kelley Blue Book's kbb.com ranks fourth among all Web sites in attracting automotive marketing dollars. Stephen Henson, vice president of marketing and business development for kbb.com, says in addition to a huge visitor base, his site has other distinct advantages.

An automaker can advertise its product to a shopper researching a competitor's vehicle. Kelley also guarantees marketers that ads will reach legitimate buyers, 90 percent of whom say they will be buying within four months.

"What the OEMs have been saying is they're shifting dollars away from lifestyle (highly targeted) sites and looking at having to measure what they're spending," Henson says.

Saab Cars USA Inc. Internet Marketing Manager Colin Price agrees that automakers need to measure spending, but he says automakers aren't necessarily abandoning highly targeted lifestyle sites such as the Outside magazine site or gay.com.

Saab, which saw its Internet ad budget decrease in 2002 because of financial losses, says the focus is on finding a guaranteed return, no matter the mission of the Web site.

Price says a variety of Internet campaigns, such as sweepstakes, still are snagging buyers while getting out the brand message.

That follows Saab's two-pronged approach to Internet marketing, which is to tout the latest deals and push brand awareness.

In addition to specific campaigns and some testing of new sites, he says Saab consistently relies on a rising number of the Internet's proven mainstays, including Kelley Blue Book.

Some slash

While many automakers increased their Internet advertising budgets, some slashed budgets in favor of other media in 2002.

Mitsubishi Motors North America, which increased its traditional ad budget 23.7 percent to $280 million in 2002, cut its Internet funds by a 7.8 percent. BMW of North America LLC managed to increase its ad spending 71.7 percent last year but cut Internet spending 75.4 percent. Both companies have cut Internet spending on a year-to-year basis since 2000.

Chris Marshall, Mitsubishi's Internet manager, says Internet spending may be down, but reliance on the medium remains as great as ever.

He points to major vehicle introductions that rely on a unique media mix, such as the Outlander sport wagon introduction in 2002, as a reason for Mitsubishi increasing its budget on traditional ads but decreasing its Internet budget. In addition, he says,

Mitsubishi has increased efforts to send customers to its own site, which was redesigned.

Ward Burton, a native Virginian, may not eat a dozen dogs daily like some drivers, but he has been cutting the mustard lately at Martinsville in the No. 22 Caterpillar Dodge Intrepid. Burton, 41, lives in nearby South Boston, Va. Fresh off his first top 10 finish of the season last week at Talladega, Burton would like nothing better than to continue his hot streak Sunday in the Virginia 500 NASCAR Winston Cup race at the .526-mile oval.

With two top-five finishes in his last three starts at Martinsville, Burton will be one of the key drivers to watch in Sunday's 500-lap event.

"It's always been a special place to me since it is considered to be a hometown track," Burton said. "Those Virginians are pretty serious about their racing. We always have some friends and family that comes to the race to cheer us on, and it would be nice if we could have a good run in front of the hometown crowd.

"We had a real good run last fall at Martinsville and had a solid chance to get a win. We need to have another race like that this weekend. It has been an up and down track for us. We've had some good runs there and then last spring we had a terrible car and couldn't get out of our own way. We went back in the fall and had a great qualifying effort and followed it up with a top-five finish. We need to have another solid day in the No. 22 Caterpillar Dodge on Sunday."

The affected trucks are equipped with Cummins diesel engines and manual transmissions. They are from the 2500 and 3500 series.

The company found that some engines were not returning to idle after drivers made extensive use of cruise control, the National Highway Traffic Safety Administration reports.

The agency says the problem could cause unintended acceleration and extended stopping distances.

NHTSA also says General Motors is recalling more than 18,000 Chevrolet Express and GMC Savana vans from the 2003 model year so that front seat belt buckles can be replaced.

The agency says the buckles either may not hold in a crash or may not release after a crash.

Here are other recalls that NHTSA reports:

The Energy Department's statistical agency revised its price forecast sharply downward Tuesday to reflect the recent fall in crude oil prices. But it also warned of uncertainties that could cause prices of both crude oil and gasoline to rebound.

The price of crude, which hit a high of nearly $40 a barrel on Feb. 27, was around $28 a barrel on the New York Mercantile Exchange on Tuesday. It has dropped by about 20 percent since the war began in Iraq.

A month ago, before the war in Iraq, the agency predicted gas prices would average more than $1.70 a gallon through the summer, hitting $1.76 this month.

Instead, gasoline prices have dropped about 10 cents a gallon in the last three weeks from a high of $1.73 a gallon in early March. The national average was $1.63 a gallon Monday, the Energy Department's Energy Information Administration (EIA) reports.

"I believe we have seen the peak," agreed Kyle Cooper, an energy analyst for Citigroup in Houston. But he said there are still so many uncertainties, from the pace of recovery of Venezuela's oil industry and problems with Nigerian oil supplies to questions about Iraqi exports, that the trend might not hold up.

And OPEC producers may pull back on production when they meet April 24 amid their concern over declining prices. The 10 Organization of Petroleum Exporting Countries, excluding Iraq, pumped an average of almost 26.34 million, 42-gallon barrels a day in March, according to Platt's, or 2.4 million barrels a day over their agreed quota.

Government and private analysts noted that overall U.S. crude inventories remain low and gasoline stocks are even lower to where even modest supply problems could cause prices to surge.

"You still have very tight gasoline inventories, and it's going to take quite a while to replenish them," said John Kingston, global director for oil for Platt's.

Guy Caruso, head of the EIA, said the industry faces "an uphill battle to meet inventory requirements" for this summer when demand is expected to increase by about 1.6 percent over last summer.

At the company's annual meeting Wednesday, Chairman Juergen Schrempp said falling sales and rising incentive costs have put more pressure on Chrysler. He said the division will step up cost-cutting and "endeavor" to reach a target of $2 billion in operating profit -- excluding onetime charges -- this year, compared to 1.32 billion euros ($1.41 billion) in 2002.

Chrysler will intensify efforts to cut costs in areas such as procurement and logistics, spokesman Hartmut Schick said. No new plant closures or job cuts are planned, he said. Schrempp said the company will introduce 16 new models between now and 2005, including the Chrysler Crossfire and Pacifica and the Dodge Durango this year.

Mercedes-Benz will launch its SLR super sports car this year, the replacement for the SLK small roadster in 2004 and "over a dozen" new models by 2005, he said. Mitsubishi, a fully integrated member of DaimlerChrysler's car business, will launch 12 new models by 2007, he said. There was little mention of Hyundai, whose role in the corporation is undefined.

The cloudy outlook did little to temper the dissatisfaction of small shareholders, who use the annual meeting to air their views. Some shareholders remain dissatisfied with Chrysler and blame the division for everything from DaimlerChrysler'sfalling stock price to quality problems in Mercedes cars. The corporation's stock has lost more than two-thirds of its value since the 1998 merger; it closed up 35 cents at $32.74 Wednesday.

Most of the 8,500 investors present were guardedly optimistic about Chrysler, however, and some became downright enthusiastic when the subject turned to Chrysler Group CEO Dieter Zetsche. The reaction suggests that his success at cutting costs and revitalizing the product line makes him a strong candidate to succeed Schrempp someday.

Schrempp's term as DaimlerChrysler CEO will end in two years. He has hinted he might like another 5-year term, but the expectation in Germany is that he will step aside then.

"Dr. Zetsche has done a very good job. Maybe he should succeed Mr. Schrempp," said Torsten Thier of Berlin.

Zetsche won nearly unanimous praise.

"People realize that Chrysler has become more effective with Dr. Zetsche's leadership. Their products are better now. He has done a good job," said David Jaehner of Berlin.

"In the beginning, there were many cultural problems," said Ludger Felix Ramme, a Berlin lawyer. "Zetsche took care of that. The reports have spread that he's done a tremendous job. If he succeeds at Chrysler, he will be a popular candidate" for chairman.

"Chrysler has always been very innovative and forward-thinking," Ramme said. "Look at them, they invented the minivan. Innovation is always more expensive than following, so the merger is a good opportunity for Chrysler to have a very innovative image and a few technologies from Mercedes-Benz. Sort of a poor man's Mercedes-Benz."

Generally, the small investors were well informed about Chrysler, but many believed, mistakenly, that the U.S. unit racked up a series of multibillion-dollar losses. Chrysler lost $4.75 billion in 2001, but earned $639 million in 2002.

Chrysler's sales in the U.S. have fallen 6.2 percent in the first three months, dragged down by a 12-percent drop in car sales.

DaimlerChrysler is to release detailed first-quarter earnings on April 24.

"I love the PT Cruiser. It is very expressive," said Lilly Broadbeck of Stuttgart, kissing her fingertips. "Mercedes-Benz is profitable now, but in the future, the profit of Chrysler will be much bigger."

A number of stockholders said they hope the link to Chrysler would shield Mercedes from an American backlash against German cars because of the country's opposition to the war in Iraq.

While Chrysler's problems have hurt DaimlerChrysler's stock price, general economic conditions are more to blame, several investors said.

"It is a global problem for the auto industry," said Heiko Gsell, of Potsdam. "They have the same trouble at BMW and Volkswagen."

"Chrysler is trying hard to do well," Thier said as he climbed out of a Crossfire sport coupe. "The Crossfire and Pacifica look good, and I like the PT Cruiser. Because of the Crossfire, I would at least look at a Chrysler car now."

There were some skeptics.

"Chrysler has hurt Mercedes-Benz quality," said Sarah Mitloehner of Berlin. "Mercedes standards have fallen to save money."

The Chrysler group raised stickers an average of $118 in March on Chryslers, Dodge cars and Caravans, and Jeeps, an Automotive News analysis finds.

It was the Chrysler group's seventh price increase of the 2003 model year. Ford Motor Co. has raised prices six times in the current model year, and General Motors has done it five times.

The latest Chrysler increase averaged $179 on Jeeps, $144 on Chryslers and $52 on Dodge cars and Caravan minivans.

Elsewhere, Toyota Division raised prices an average of $72 on its 2003 cars and light trucks. The hikes ranged from $35 to $700 and averaged 0.3 percent, Toyota says.

The increases affected 12 of Toyota's 16 lines of vehicles. Spared the hikes were the Matrix, Prius and 4Runner and the 2004 Sienna. The new prices are effective April 21.

Through mid-May, Chrysler will train an estimated 30,000 dealership employees. That number includes all dealership employees, not just the sales staff. The main message: Chrysler wants to ride the Pacifica into a more upscale market and do what it takes to win over buyers.

"We have gone beyond competing with the Fords and the Chevys," says Luis Martinez, Chrysler group senior manager of product and sales training. "The Pacifica is the launch point for the Chrysler brand to go upscale. It is competing in an arena where you find Lexus, Acura, BMW and Volvo."

The wagon's launch is part of the Chrysler brand's strategy to sell nearly 700,000 vehicles annually within three years. Last year, the brand sold 480,263 units. The Pacifica carries a base price of $31,230, including freight. But Martinez says it's not about sticker price. Chrysler dealers already sell pricey Town & Country minivans.

He says it's about customers with high expectations, customers who may not even want to come into a dealership. "We keep on hammering on this," Martinez says. "These people's lives don't have to adapt to your way of doing business. You may have to adapt to their way of doing business and their lifestyle."

The training will take place in the Chrysler brand's top 25 markets, representing 80 percent of its retailers.

Martinez's staff shopped competitive BMW, Lexus, Acura and Volvo stores. They also interviewed owners of those brands to develop training.

The multiday Pacifica training focuses on several areas, including knowing the Pacifica and being familiar with competitive models such as the Volvo XC90, the Acura MDX and the Lexus RX 300.

Critical to successful training, Martinez says, is conveying the hybrid nature of the Pacifica. The vehicle is being positioned as a blending of car maneuverability, minivan flexibility and safety, and SUV functionality.

Salespeople are being trained to try to determine quickly which of five attributes - safety, utility, value, performance and styling - has triggered an individual's interest in Pacifica.

"The person may only have three minutes to talk with you," Martinez says. "How do you deliver something important to them?"

Pacifica advertising begins May 1 with the theme "Above and beyond."

Just three months ago, Chrysler executives blasted the industry's generous incentives. Now the company is resigned to the big handouts.

"This is the way you conduct business in this time," says Wolfgang Bernhard, Chrysler group COO. "Two or three years ago, the structure of the industry changed fundamentally with overcapacity and everybody trying to defend market share. It is just adjusting your business system to it. We will be just as aggressive as anybody else in the market."

Last week, the Chrysler group matched General Motors' new incentives on some of its models. GM is offering 0 percent loans for 60 months on all 2003 nameplates except the Hummer H1 and H2.

Chrysler's 0 percent loans for 60 months are available for the 2003 Chrysler Sebring and PT Cruiser and Dodge Stratus, all of which previously had 36-month, 0 percent financing deals.

"Everybody's out there," says Gary Cowger, president of GM North America. "Everybody's in the game."

Reluctant rebates

GM has led the industry on incentives since Sept. 11, 2001.

Other companies have followed GM's lead, kicking and screaming. For example, Chrysler group CEO Dieter Zetsche was harshly critical of GM's sales tactics early this year. "All of these policies are just trashing the whole value chain and turning the product into a commodity," he said.

Jim Schroer, executive vice president of sales and marketing for the Chrysler group, described the company as "reluctantly competitive."

In February, GM CEO Rick Wagoner had a blunt message for companies reluctant to compete with GM's incentives: "I say it's time to stop whining and play the game."

Chrysler got the message. Bernhard says incentives amount to business as usual when selling vehicles that have been on the market for several years. And Chrysler took in stride last week's fresh round of incentives from GM.

"For us, it is not a big change," Bernhard says. "We had a fairly aggressive plan in place already in March. We don't have to make many adjustments as we go forward."

Steady increase

The Chrysler group's incentive spending has increased each month since January, according to Art Spinella of CNW Marketing/Research Inc.

On a sales-weighted basis, the Chrysler group spent $2,940 per unit in January, $3,203 per unit in February and $3,298 per unit in March, Spinella says.

Bernhard says the cure for high incentives is attractive new products.

"You try to get in a position where you have more demand than supply," he says.

"You will see that we are going to have very strong demand for the Pacifica. I get calls from dealers who tell me that they don't have enough already. It is the kind of good emotion you want to have."

The company has 21,000 orders for the 2004 Chrysler Pacifica, a new sport wagon expected to generate 100,000 sales annually. The Pacifica arrived in showrooms last month.

'Zero to Sixty'

GM sweetened its incentives last week under a catchy new marketing phrase, "Zero to Sixty."

In lieu of 0 percent loans, customers can get $3,000 on all but four 2003 nameplates: Chevrolet Corvette, Pontiac Vibe and Saturn Vue and Ion. GM is offering $2,000 rebates on those four.

The incentives are in effect until April 30.

GM had generous incentives before April 1. For instance, it offered $2,000 rebates on most Chevrolets and all GMCs, Oldsmobiles and Pontiacs. GM also offered 0 percent loans for 36 months on most models.

Ford Division also is trying to put a memorable headline on its more generous incentive program. Playing on its history in its centennial year, Ford Motor Co. is bringing back the $5 day. Customers can lease Mustang coupes or Ranger pickups for $5 a day, or about $150 per month. The 48-month leases require down payments of 10 percent of the capitalized cost.

Henry Ford caused a sensation in 1914 when he started paying blue-collar workers $5 a day.

Ford Division matches GM's 0 percent loans for 60 months on the 2003 Taurus, Windstar, Crown Victoria, Explorer, Explorer Sport, Expedition, Excursion, Econoline, Ranger and F-150 pickup.

As Chrysler's Bernhard now acknowledges, the blizzard of rebates shows no sign of abating.

The entry-level luxury market is growing, and the $31,230 Pacifica is the right vehicle at the right time, one market analyst says.

But the Chrysler brand lacks a reputation for high-quality vehicles. And in 2002, only 3 percent of Infiniti owners and 3 percent of Volvo owners who switched brands chose a Chrysler brand vehicle, according to an industry survey.

"They definitely have a long, hard road ahead of them," says Jeff Schuster, director of North American forecasting for J.D. Power and Associates, which did the study. "The Pacifica is a solid product. From an image standpoint, it should certainly move up the Chrysler brand. The issue is having the quality to back everything up."

Premium aspirations

Wolfgang Bernhard, Chrysler group COO, says: "Chrysler is still a volume manufacturer. We are not going for a luxury segment like Cadillac or BMW. But within that volume segment we would like to have a premium.

"That means you work on the brand recognition of the Chrysler brand," he says. "And at some point in time you put the Chrysler badge on the vehicle, and suddenly you get a thousand bucks more because that badge is on it."

In the showroom, Chrysler is training salespeople to sell the Pacifica against the Volvo XC90, Acura MDX and Lexus RX 330.

Today, few buyers of those import luxury brands are seeking out Chrysler vehicles.

Industrywide, only 4 percent of buyers who switched vehicle brands in 2002 bought a Chrysler brand vehicle, according to the J.D. Power owner-loyalty survey of 9,364 consumers. In the data sample, no Acura or Lexus buyer switched to a Chrysler brand vehicle. For comparison, among those who switched brands, 14 percent chose Chevrolet and 11 percent selected Toyota, the top two most sought-after brands in the sample.

Pacifica advertising begins May 1. The wagon's launch is part of the Chrysler brand's strategy to sell nearly 700,000 vehicles annually within three years. Last year, the brand sold 480,263 units. Chrysler wants to sell about 100,000 Pacificas annually.

The rear-wheel-drive, two-passenger 2004 Crossfire is expected to go on sale this summer starting at about $35,000. The Pacifica carries a base sticker of $31,230, including freight.

Celine Dion glamour

The Chrysler brand is trying to use glamour and nuts-and-bolt manufacturing to effect its makeover.

Singer Celine Dion is providing the glamour. The Chrysler brand is using her image and voice in TV commercials and other promotions.

For example, people attending Dion's Las Vegas show, which is running for three years at Caesars Palace, are ushered to seating sections dubbed the Chrysler salon, Crossfire salon, Pacifica salon and Sebring salon.

Bonita Stewart, director of Chrysler brand marketing communications, says the tie between the Chrysler brand and the six-time Grammy Award winner who has sold 150 million albums, is working.

For example, traffic spiked at five times its typical volume at Chrysler.com when Dion sang the national anthem at the Super Bowl, Stewart says. Dion sang one week after Chrysler began airing TV commercials featuring the singer.

"She is singing 'God Bless America,' and they are coming into Chrysler.com," Stewart says. "Our Super Bowl commercial had not run yet. Our spot was later. People are recognizing a connection between the Chrysler brand and Celine. That tells us that we picked the right representation for the brand and that it is resonating with consumers."

"Quality is an area Chrysler will need to address, especially with Lexus in the mix," says J.D. Power's Schuster. "Not initial quality. With Chrysler the issue is more with durability and long-term quality. That has been a concern with Chrysler products. And we won't know the answer to that question until the Pacifica has been out three or four years."

Needed: Better quality

Don Dees, vice president of quality for the Chrysler group, acknowledges the consumer perception of lackluster manufacturing.

In a company survey conducted last summer, consumers ranked the quality of Dodge, Chrysler and Jeep brand vehicles below the industry average, he says. Among consumers intending to buy a new vehicle, 38 percent said the Chrysler group and Ford Motor build high-quality vehicles. For contrast, 67 percent cited Honda as a high-quality manufacturer and 64 percent cited Toyota.

Manufacturing changes are under way. Fifty-four teams are working to make components more robust, and Chrysler is advertising heavily its 7-year/70,000-mile powertrain warranty to refurbish the company's quality image, Dees says.

Vehicles such as the Chrysler Town & Country minivan and Sebring convertible already have boosted the Chrysler brand, says J.D. Power's Schuster. "Now we are seeing a more defined lineup that positions the entire brand upward, not just single vehicles."

In an order dated Wednesday, Delaware U.S. District Judge Joseph Farnan set the trial for Dec. 1, citing the need for more time to consider motions for and against summary judgment and to resolve a number of disputes over evidence.

The shareholders, led by billionaire investor Kirk Kerkorian, claim DaimlerChrysler lied to them about the nature of the merger. DaimlerChrysler says the investors were well informed about the 1998 deal between Daimler-Benz AG and Chrysler Corp. billed as a "merger of equals."

The lawsuits were sparked by comments that DaimlerChrysler Chairman Juergen Schrempp made to The Financial Times in October 2000, that he always intended Chrysler to be a division of DaimlerChrysler AG.

Kerkorian claims had he known Schrempp's intentions, he would have demanded a higher price for Chrysler's shares.

The case has drawn international attention and generated a massive amount of paperwork. DaimlerChrysler and the shareholders have repeatedly sparred over evidence.

Auburn Hills, Mich.,
April 1, 2003

Chrysler Group reported sales of 201,941 units in March 2003, a three percent decline compared with March 2002, calculated on a day-rate basis.

"Despite the economic effects of the military conflict in the Middle East, we're still seeing car and truck shoppers in Chrysler, Jeep® and Dodge dealerships," said Gary Dilts, Chrysler Group Senior Vice President - Sales. "The Chrysler Group held its own in March because we're cutting through the clutter and reaching consumers."

"We plan to continue our 'Best Values in America' message in April because it provides a p