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Fri, Nov 03, 2006 - Page 10 News List

DaimlerChrysler mulling Chrysler sale

AFP , FRANKFURT

Eight years after buying the US automaker Chrysler, DaimlerChrysler is believed to be mulling a sale of the loss-making division.

"We would be completely thoughtless if we were not preparing an exit strategy," an unidentified member of the DaimlerChrysler board was quoted by the weekly German magazine Der Spiegel as saying.

Financial director Bodo Uebber told reporters last week: "We are not ruling out anything."

DaimlerChrysler shares have gained more than 5 percent in the past week, and closed on Wednesday at 45.69 euros (US$58.35), a gain of 2.21 percent on the day.

Third quarter results published last week were underpinned by the German division Mercedes, while Chrysler, which also includes the Dodge and Jeep brands, posted an operating loss of 1.2 billion euros.

The Chrysler catalogue is comprised in large part of four-wheel drive sports utility vehicles (SUVs) and pick-up trucks but US consumers are beginning to favor cars that consume less gas.

Last month DaimlerChrysler sales in the US fell by 2 percent compared with the same month a year earlier, even though Mercedes-Benz dealers reported their best October ever, the group said on Wednesday.

Sales by the Chrysler Group fell by 3 percent to 159,586 vehicles, while Mercedes sales surged by 12 percent to 20,598 vehicles. It must now come up with its third restructuring plan since 1998.

Over the first 10 months of the year, DaimlerChrysler's US sales were down by 7 percent, reflecting a 9 percent drop in Chrysler brands and a 13 percent increase in Mercedes sales.

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