Chrysler is to cut 1,825 jobs in the US, as demand for cars slows in tandem with economic growth.

A factory in Newark will now close at the end of this year, one year earlier than anticipated, and one shift at Toledo North Assembly Plant will go.

A senior official at Chrysler said that this was a “time of historic change in the auto industry”.

Carmakers such as Daimler, Hyundai and Fiat have forecast a tough year ahead, as consumers tighten their belts.

“The markets are facing unprecedented turmoil and we are in a time of historic change in the auto industry,” said Frank Ewasyshyn, Chrysler’s executive vice president of manufacturing.

The job cuts account for 6% of its American workforce.

The Toledo factory has been making the Dodge Nitro and Jeep Liberty, which have both been selling slowly. The Newark plant makes Dodge Durango and Chrysler Aspen sport utility vehicles.

Italian gloom

Earlier on Thursday, Italian carmaker Fiat had said that in a worst-case scenario its 2009 profits could fall by 65%, while global demand for its products could drop by 10-20%.

Fiat’s turnaround has been helped by the popularity of the 500 model

Even though Fiat made clear that its forecasts were a worst-case scenario, analysts took them as a profit warning.

The Italian company added that it believed the “erratic” conditions in financial markets were temporary and insisted they would not affect the “overall substance” of its turnaround target for 2010.

In recent years, Fiat has successfully turned around its business, helped by the revival of the cult Fiat 500 car.

Fiat’s third-quarter earnings were better than expected, with profit 8% higher at 802m euros (£632m), a performance it attributed to strong sales of farm machinery.

Korean realism

Hyundai Motor Company reported a 38% fall in third-quarter net profit, which was slightly better than expected.

Hyundai says demand in emerging markets is dropping

It expects to sell slightly fewer vehicles – 3.02 million versus an earlier forecast of 3.11 million – this year, but said it should meet other sales and operating targets, in part because of increased demand for more compact cars.

“Demand for smaller cars is rising, although global auto demand is shrinking,” said Park Dong-wook, a director at Hyundai’s treasury division.

“The market situation in emerging countries is much worse than expected,” he added.

Daimler

German carmaker Daimler reported a 213m-euro profit for the quarter, a dramatic turnaround from the 1.5bn-euro loss it saw in the same period a year ago.

Last year’s loss reflected “special effects from the Chrysler transaction”, the statement said, alluding to Daimler’s sale of 80% of Chrysler to Cerberus, a US private equity group, in May 2007.

But Daimler saw plenty of evidence of the impact of the banking crisis on consumer confidence, as sales fell.

Daimler sold 522,500 passenger cars and commercial vehicles in the third quarter, down 3% from the 537,000 sold in the same period last year. Its revenues were 23.8bn euros, down from 25.7bn euros.

“We recognise that the situation is very challenging indeed,” said Dieter Zetsche, chairman of Daimler’s board of management.

News reported by The BBC

US car giants General Motors and Chrysler are in talks about a possible merger, US media say.

Reports say the talks have been going on for a month but details of the deal vary from a merger to an acquisition by GM of Chrysler.

GM is the leading manufacturer and Chrysler third after Ford. All have been suffering with a plunge in US sales to 15-year lows.

Neither of the parties have made any direct official comment.

Ford move

Sources told the Wall Street Journal that Cerberus Capital Management, which owns 80.1% of Chrysler had proposed trading its automotive operations to GM in return for GM’s stake in the auto lender GMAC Financial Services.

The New York Times’s sources spoke of a merger that was a “50-50″ possibility, although it could take weeks to finalise and had been stalled by the turmoil in the financial markets.

GM spokesman Tony Cervone said: “Without referencing this specific rumour, as we’ve often said, GM officials routinely discuss issues of mutual interest with other automakers.”

Analysts have questioned Chrysler’s position, given its reliance on North America for 90% of its revenue.

Both companies have been hard hit by falling truck and SUV sales and are struggling to push through job cuts against union opposition.

GM shares hit a 60-year low this week. It posted a second-quarter net loss of $15.5bn.

Separately, Reuters reports that Ford is planning to sell most of its 33.4% holding in Japan’s Mazda.

News reported by The BBC

Daimler has said it is in talks with private equity group Cerberus to sell its remaining 19.9% in struggling US carmaker Chrysler.

Cerberus bought 80.1% of the firm in May 2007 after Daimler walked away from its huge investment.

The $7.4bn (£4.1bn) deal was struck just before a sharp slowdown in overall US car sales. The value of Daimler’s remaining stake is unknown.

Chrysler is restructuring – closing factories and cutting jobs.

US consumers are moving towards smaller and more fuel efficient vehicles amid higher fuel prices.

However gas-guzzling light trucks make up about 70% of Chrysler’s production volume.

The company’s sales fell by almost 25% in the first eight months of 2008.

News reported by The BBC

Chrysler has announced plans to invest $1.8bn (£964m) in new vehicle projects and plans to expand plant in Detroit.

Expanding the Jefferson North plant will allow more flexibility and higher output, said the firm.

The expansion will also create 400 jobs, said Chrysler’s president Tom LaSorda during a car event in Michigan.

The news comes as the car manufacturer has embarked on cost cutting plans, by reducing the workforce and capacity to offset a slump in sales.

“This investment enables us to produce a new generation of world-class vehicles that meet the demand of our consumers around the globe,” said Mr LaSorda.

The plant currently produces the most popular model in Chrysler’s line-up, the Jeep Grand Cherokee – but demand has been hit by high petrol prices.

Chrysler, Ford and GM have all been hit by falling demand for their vehicles – especially larger gas-guzzling models.

Consumers have been switching to more fuel-efficient models as the price of oil has risen sharply.

In particular, sales of minivans, trucks and sports utility vehicles have all dropped significantly.

Mr LaSorda also said the car firm has singled out $1bn in non-essential assets that the firm would be able to sell.

Chrysler was bought by private equity firm Cerberus after Daimler decided to walk away from its huge investment in 2006.

News reported by The BBC