AutoNation says Chrysler products key

DETROIT (Reuters) - Chrysler's turnaround plan, due to be announced on Wednesday, needs to show long-term product development and financial stability for the largest U.S. auto dealership group to even consider adding franchises, AutoNation Inc (AN.N) Chief Executive Mike Jackson said.

"I need to see a product plan that works, a financial plan supported and retail brand strategy that can be profitable," Jackson told Reuters Autos Summit in Detroit.

Jackson said General Motors Co's GM.UL Chevrolet brand and the Ford Motor Co (F.N) Ford brand are iconic and he has been considering adding those dealerships.

Jackson said he has been impressed by Fiat SpA (FIA.MI) Chief Executive Sergio Marchionne, who took over management control of the Chrysler after it completed its bankruptcy reorganization in June.

"He is a car guy, I like that. He may not be by background, but he sure knows his products inside and out," he said.

Jackson, who will attend a day-long Chrysler presentation on its turnaround plan in Detroit on Wednesday, said he had met previously with Marchionne. Their conversation was dominated by a discussion about current products, future products, their brands and what he might do to turn it around, Jackson said.

"I told him he has the biggest challenge of anybody in the industry and whatever he thinks it is multiply it by whatever factor it is and he will begin to understand what he is into."

Overall, AutoNation is looking at possibly acquiring dealerships under the Chevrolet, Ford, Nissan, Toyota, Honda, Mercedes, BMW and Lexus brands, he said.

"Clearly on Ford and Chevy we have been neutral for the last several years and only now do I feel comfortable enough to say let's go buy them," Jackson said.

Jackson also believes the U.S. economy is through the worst of its downturn. AutoNation has gone from a defensive to an "opportunistic" posture on acquisitions, he said.

""The death spiral has ended," Jackson said of the economy. "We are not all going into the abyss. Our Armageddon has been avoided."

Jackson expects U.S. auto industry sales to rise to about 11 million vehicles in 2010 and a gradual recovery in sales toward the 15 million to 16 million unit level over five years, still below the former peak at around 17 million.

With a massive restructuring of the industry, U.S. sales do not have to return to that former peak to generate profits.

"The profitability is going to be so much more vibrant on the way back up at much lower volume levels that it's a completely different industry than it was before," he said.

(For summit blog: blogs.reuters.com/summits/)

(Reporting by David Bailey)