updated 1/4/2007 4:42:40 PM ET 2007-01-04T21:42:40

Chrysler Group, struggling with declining sales in the United States, plans to expand production in China and Taiwan in hopes of doubling vehicle sales outside North America in the next five years.

“I think this is a huge, huge change in how we’re going to attack the international markets,” said Tom LaSorda, president and chief executive of DaimlerChrysler AG’s Chrysler Group. “Asia will be big, and we think South America has huge growth for us as well.”

LaSorda outlined the automaker’s future plans in a conference call with reporters Thursday after Chrysler reported that sales in non-U.S. markets increased 6.6 percent in 2006 thanks to strong new launches such as the Dodge Caliber and Jeep Compass.

The Auburn Hills, Mich.-based arm of the German-American automaker said it sold 555,924 vehicles outside of the U.S. last year. Sales rose 15 percent outside North America to nearly 207,000 units, fueled by a 20 percent jump in Europe, while sales in Mexico grew by 3.3 percent and sales of DaimlerChrysler Canada rose 1.7 percent on five consecutive months of sales growth.

Sales in the United States dropped 7 percent during 2006 to roughly 2.14 million units.

Of the initiatives designed to boost global sales, one involves a joint venture with China Motor Corp., which will build a cargo van in Taiwan to be sold in Mexico under the Dodge nameplate by the end of the year. LaSorda said the deal also extends the long-term partnership with CMC, which already produces the Chrysler Town & Country minivan in Taiwan for the local market.

Chrysler also will produce a minivan with CMC and Fujian Motor Group in Fuzhou, China, for the Chinese market, company officials said.

LaSorda also said Chrysler will begin production later this year of the new Chrysler Sebring for sale on the Chinese market. The Sebring will be made at the Beijing-Benz DaimlerChrysler Automotive Co. plant, which also builds the Chrysler 300C, the Mercedes-Benz E-Class and Mitsubishi Outlander.

Four-cylinder engines for use in the Sebring will be built at the Global Engine Manufacturing Alliance plant in Dundee, Mich., and shipped to China, LaSorda said.

LaSorda said 2007 will be a peak year for Chrysler product offerings around the world, following a year that saw the launch of 10 new vehicles, the biggest launch in the company’s history. The automaker plans this year to quadruple the number of vehicles offered with fuel-efficient diesel engines.

Also, LaSorda confirmed that Chrysler has agreed in principle with Chery Automobile Co. of China to produce subcompact cars under a Chrysler nameplate beginning some time after 2007. They will be sold in North America, Europe and possibly other global markets.

LaSorda said the agreement with Chery allows Chrysler to quickly introduce a new product segment while meeting targets for cost and quality with minimal capital investment.

The silver lining of global sales growth comes on the heels of data released Wednesday that showed Toyota Motor Co. leapfrogged DaimlerChrysler in U.S. sales in 2006 for the first time, according to Autodata Inc. Toyota, which includes the Toyota, Lexus and Scion brands, ended the year with 15.4 percent of the U.S. automotive market, compared with DaimlerChrysler’s 13.3 percent.

DaimlerChrysler won’t release its 2006 earnings until February, but is expected to announce a restructuring plan that includes job cuts and plant closures. The company lost $1.5 billion in the third quarter.

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