Chrysler bets $1.8 billion on car-based sport utility vehicle

Some are Wall Street analysts already are betting against Chrysler,  but the automaker still is making a few bets of its own.

The Associated Press this morning is reporting that Chrysler LLC Vice Chairman Tom LaSorda said his company will invest $1.8 billion in a Detroit assembly plant, retooling it to make a new car-based sport utility vehicle.

LaSorda said the money will go for tooling and a flexible body shop at the Jefferson North Assembly Plant. That plant now makes the Jeep Grand Cherokee.

The new vehicle will be more fuel efficient than the truck-based Cherokee and will be equipped with the company’s new Phoenix line of fuel-efficient engines.

LaSorda says the factory should be retooled by the end of next year and will start cranking out the new vehicles early in 2010.

Meanwhile, The New York Times this morning is reporting on the struggle automakers are having with selling their large truck-based  S.U.V.s.

“These big trucks and S.U.V.’s are really dinosaurs at this point,” John Blair, chief executive of Automotive Lease Guide, told the Times. “Consumers like S.U.V.’s. They haven’t fallen out of love with the things that made them popular, but it’s just become an issue of economics. When you look at paying several hundred dollars a month more in fuel, that becomes a big deal for most households.”