Chrysler needs 18% jump in U.S. sales to profit -CEO

Chrysler Group LLC can be profitable this year if its sells 1.1 million vehicles in the U.S. and 1.65 million worldwide, CEO Sergio Marchionne said.

Those sales targets represent an 18 percent improvement over Chrysler's 2009 U.S. sales and a 27 percent jump from last year's global total, both tall orders given that most industry leaders say they expect U.S. sales to rise about 10 percent this year to 11.5 million.

The difficulty is heightened by the timing of Auburn Hills-based Chrysler's new product launches that won't have much impact until the second half of the year.

Marchionne, speaking last week at the media preview for the North American International Auto Show, also opened the door slightly to the possible reinstatement of a few of the 789 dealers it terminated last June as part of its bankruptcy exit plan.

"I think we're willing to engage in a dialog with dealers that were not renewed with Chrysler," Marchionne said.

Congress has passed legislation that would give dealers who lost their General Motors or Chrysler franchises the chance to appeal before an arbitrator. If the arbitrator rules a dealer lost a franchise despite meeting the automaker's criteria for selecting surviving dealers, that dealer could be offered a new location for selling Chrysler, Jeep, Dodge and Ram vehicles. If the arbitrator upholds Chrysler's decision not to renew the franchise, dealers would have no other appeal.

"In hindsight it was a good decision and I'm relatively confident" in the criteria "we established in the selection process," Marchionne said about the dropping of about a quarter of the company's dealers.

But he added that there may be some locations where he would consider adding dealers "if they have a viable business case."