March 7, 2009 at 2:27 pm

Press: Chrysler sales enough

Press )

DETROIT -- Even though its sales were down 44 percent last month, Chrysler LLC Vice Chairman Jim Press said the automaker is on target to meet sales projections outlined in its viability plan submitted to Congress last month.

Chrysler sold just over 84,000 cars and trucks in February, 44 percent fewer than the 150,000 it sold the same month last year.

But Press said in an interview with The Associated Press on Friday that 84,000 in February is enough to keep the company going. He says retail sales to individuals dropped 25 percent, but that was a lower decline than any of Chrysler's competitors.

Chrysler has received $4 billion in government loans and is seeking $5 billion more. Without the loans, the company would have faced bankruptcy protection or liquidation.

"It's sustainable," Press said of February's sales levels, calling it a good month relative to the company's sales in prior months.

U.S. light vehicle sales overall were down 41 percent in February, but in absolute numbers were up 4.9 percent over January sales.

Chrysler, Press said, even beat Ford Motor Co. in retail sales. Press also said Chrysler is cutting its low-profit fleet sales to rental car companies.

"With 84,000 in February, we're on our target that we established with our viability plan, our submission with Washington," he said.

In its plan, Chrysler showed it could survive if U.S. sales fell as low as 10.1 million vehicles per year, Press said. February's annual selling rate was 9.1 million vehicles, but Press said sales should rise in March, April and May.

The company, he said, is trying to "build muscle" to cope with depressed auto sales levels.

"Who knows how long we're going to be in this?" Press asked. "This is going to be a year, two years, or longer. So we've got to find a ways to try and manage through this and that's what we're doing."

Chrysler spent more on incentives such as rebates and low-interest financing in February than any other major automaker, according to the Edmunds.com automotive Web site. The company spent an average of $5,508 per vehicle during the month, more than $1,800 above the second-biggest spender, General Motors Corp. at $3,681, Edmunds said.

Press also said Chrysler still will not need more government loans until March 31, the date of its original request for a second installment. And he said negotiations with Italy's Fiat Group SpA to take a 35 percent stake in Chrysler in exchange for its small-car technology are progressing.

Asked if Chrysler might run out of cash before March 31, Press reiterated that it is matching the plan submitted to the government. The company came perilously close to running out of money in December before the government loan was made available.

On Fiat, Press said the companies are planning for a combination.

"We're hopeful. We've seen no roadblocks between us," he said.

On Thursday, Fiat Chief Executive Sergio Marchionne told reporters that talks were "well advanced" and that Fiat could match timelines set by the Treasury Department for a combination.

Fiat would put no cash into the Chrysler deal, but would offer small-car and small-engine technology.

"We think we are adding significant technology and products to the offering of Chrysler. I think with them they have a fair chance of making it out," Marchionne said after meeting with the government's auto task force.

The deal with Fiat is contingent on further government loans being approved, he said.

Press said Marchionne has been through a large restructuring of Fiat similar to what Chrysler is going through.

The Italian company, he said, has the most fuel-efficient product line in Europe.

"It's just exactly what would really play well here," he said.

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Associated Press Writer Ken Thomas in Washington, D.C., contributed to this report.

AP-CS-03-06-09 1654EST