Chrysler to begin building the next Jeep Grand Cherokee in May

Chrysler Group will begin building the 2011 Jeep Grand Cherokee--the first salvo in an effort to restore a product-starved lineup--on May 3, CEO Sergio Marchionne said Tuesday.

Marchionne told an industry conference in New York that sales of the redesigned Grand Cherokee will begin in July. Chrysler plans to have 100 percent of its existing lineup refreshed or replaced by the end of 2012, as a wave of new products derived from the alliance with Fiat S.p.A. begins to gain strength.

The Grand Cherokee, assembled in Detroit, was Jeep's second-strongest U.S. seller last year, accounting for about 22 percent of the brand's volume. The company hadn't previously spelled out a schedule for the redesigned version.

Marchionne said he is pushing for “an attention to quality that is probably unprecedented in Chrysler.”

“It needs to be flawless--our definition of quality,” Marchionne told the National Automobile Dealers Association/IHS Global Insight Automotive Forum.

In a speech interrupted by a protester shouting about U.S. taxpayer dollars going to Chrysler, Marchionne vowed to repay the loans from the U.S. and Canadian governments. But he said the federally mandated arbitration process for rejected Chrysler dealers has slowed efforts to improve the dealer network.

Marchionne also said:

-- The United States should encourage compressed natural gas as an alternative fuel that easily could be integrated into the existing distribution network at a relatively low cost. Fiat is a major producer of CNG commercial vehicles in Europe.

-- He has 78 direct reports globally.

-- Chrysler is on track to break even on an operating basis in 2010 and currently holds more than $5 billion in cash. In addition, he said the company's breakeven point was substantially lower than most analysts estimated.

Bradford Wernle contributed to this report.

By Dave Guilford- Automotive News