Chrysler is developing a compact car

ENLARGE

Dodge Hornet concept car

FRANKFURT (Thomson Financial) -- Chrysler is developing a compact car model based on the concept car Hornet, which it presented at the 2006 Geneva auto show, Financial Times Deutschland reported, citing Thomas Hausch, the company's vice president for international purchasing.

"We are working intensely on the Hornet study," Hausch said.

"I think we will announce something on this in the future."

The new model will likely be launched in 2010 in Europe, the United States and other markets, Financial Times Deutschland said.

U.S. carmakers including Chrysler and Ford Motor are turning to smaller cars as soaring gasoline prices weigh on demand for gas-guzzling SUVs and pickup trucks in the U.S.

Also, building compact cars may help reduce their dependence on the U.S. market, where the financial market crisis and high gas prices have led to a slump in car sales in past months.

"The international share will continue to rise," Hausch said.

The company in May sold 10.7 percent of its vehicles abroad, though U.S. sales that month slumped 25 percent.

Hausch declined to say whether the new compact car will be sold under the brand Chrysler or Dodge.

"But I cannot rule out that there may be a Chrysler that is smaller than our economy model, the 2-liter Sebring," Hausch said.