Chrysler has announced it will be running its North American plants at full capacity for the first time since 1999. The American arm of DaimlerChrysler attributes the increased productivity to demand for its popular new vehicles, including the Chrysler 300 and upcoming Dodge Caliber.
The production increase is impressive. The smallest of the (former) Big Three domestic manufacturers ran at ninety percent in 2005, making it second to Toyota at 107%. (This is significant because running a plant at full capacity maximizes its efficiency since costs are essentially fixed, regardless of output.) Chrysler ran at about eighty percent capacity in prior years. Besides demand for new models, the company attributes the increase in efficiency to cost-cutting over the past four years and investment in automation (robots) for its factories.
Chrysler’s market share rose from 13.1% to 13.6% last year, the only domestic manufacturer to show an improvement.
The production increase is impressive. The smallest of the (former) Big Three domestic manufacturers ran at ninety percent in 2005, making it second to Toyota at 107%. (This is significant because running a plant at full capacity maximizes its efficiency since costs are essentially fixed, regardless of output.) Chrysler ran at about eighty percent capacity in prior years. Besides demand for new models, the company attributes the increase in efficiency to cost-cutting over the past four years and investment in automation (robots) for its factories.
Chrysler’s market share rose from 13.1% to 13.6% last year, the only domestic manufacturer to show an improvement.
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