Reuters Summit-New models needed to drive Chrysler-experts

(For other news from the Reuters Autos Summit, click here)

* Biggest issue is filling product pipeline void

* Momentum would help restore consumer confidence

By Jo Winterbottom

DETROIT, Nov 2 (Reuters) - Chrysler's survival is far from certain and time is short for Fiat SpA (FIA.MI) to roll out the new products the U.S. automaker needs to win back customers and dealers.

At the Reuters Autos Summit on Monday two days before Chrysler's chief executive, Sergio Marchionne of Italy's Fiat (FIA.MI), takes a whole day to present his five-year strategy for the company, participants stressed the need for a swift launch of fresh models.

"The biggest issue for Chrysler is how quickly they fill the void in their product pipeline," said Earl Hesterberg, chief executive of Group One Automotive Inc (GPI.N), the No. 4 U.S. auto dealership.

"They need to minimize the downtime in terms of fresh, new models into the market," he added.

Bill Diehl, chief executive of advisory firm BBK, said Marchionne had to restore consumer confidence in the brand.

"If they can't show momentum you will have consumers concerned about the survival of the company. (Marchionne's) challenge is to demonstrate to consumers his plan is viable," Diehl said.

There is time pressure to deliver new models, he said, adding consumers might not wait until the end of 2010.

Marchionne said in September he was surprised at how little had been done in the past 24 months at Chrysler and admitted the restructuring of the company had been more difficult than he initially thought it would be.

Chrysler restructured in bankruptcy last spring, financed by the Obama administration. Fiat was given a 20 percent stake in Chrysler in exchange for providing the expertise to build smaller and more fuel-efficient cars.

Marchionne's strategy for Chrysler will scrap the U.S. automaker's long-held plans for its brands outside North America with the exception of Jeep, people with direct knowledge of the plan said. [ID:nN02405559]

Fiat is likely to use some models outside the United States to expand the offer of its Lancia brand.

"Obviously the brand that has the most international appeal is Jeep. If I were in Marchionne's shoes, I would emphasize Jeep rather than Chrysler or Dodge," said Jerry York, an executive at Chrysler in the late 1970s and a former board member of General Motors.

Diehl said for Fiat "to pick up the global piece of this rather than Chrysler ... does make some sense."

Chrysler generates around 10 percent of sales outside the United States for its Chrysler, Dodge and Jeep brands -- virtually unchanged, York pointed out, from when he left in 1993.

For its domestic offering, Chrysler is likely to make some improvements to vehicle interiors and to use Fiat's MultiAir engine technology to cut emissions and improve fuel consumption.

Hesterberg said interiors in some models, such as the Dodge Ram truck, had already been improved before Fiat took the reins.

Chrysler has faced criticism for cutting costs too sharply under former owner Daimler AG (DAIGn.DE) and not investing in small improvements in areas like interior assemblies.

But he added that "it really takes significant new models to move these companies forward."

Chrysler's lack of fresh models is reflected in slumping U.S. sales. Sales through September are down 40 percent compared with an industry drop of 27 percent.

York said he thought the challenge was tough for the Fiat team.

"I think the odds of success here ... are probably less than 50 percent," said York.

(For summit blog: blogs.reuters.com/summits/) (Editing by Steve Orlofsky)