Analysts see Chrysler at a crossroads

AUBURN HILLS, Mich., Aug. 5 (UPI) -- U.S. auto giant Chrysler LLC is at a crossroads one year after Cerberus Capital Management LP took over, industry analysts said.

While U.S. consumer turn toward fuel-efficiency, Chrysler has 74 percent of its sales in trucks, SUVs and minivans, Autodata Corp. said.

It also will require deep pockets to get through the next two years, The Detroit News reported Tuesday.

Chrysler reported a $1.1 billion profit -- which is not net profit -- for the first half of 2008, suggesting it has a healthy cash flow, the News reported.

But, analysts say it must quickly update what Tom Libby at J.D. Power and Associates called an "out-of-touch" product line, the News reported.

Chrysler sales dropped 22.8 percent from January through July from the same period a year ago and several analysts said the company could be strapped for cash by the end of 2009.

Not everyone is counting Chrysler out, however.

"Chrysler has always been known as a lean and resourceful company," said David Cole, chairman of the Center for Automotive Research.

"They will be pressed here, but they can emerge as a fundamentally sound company if they can get past this mass hysteria," Cole told the News.