Chrysler made use of a $2 billion credit line that was a condition of its sale last year from Daimler to Cerberus Capital Management, Daimler said on Tuesday.
Chrysler is scrambling to respond to a strong customer shift away from pickup trucks and sport utility vehicles, which make up the majority of the company’s product portfolio, to more fuel-efficient vehicles. Chrysler also has a relatively high reliance on the American market, which accounts for 90 percent of its sales.
The credit line had been established in August 2007 when the former DaimlerChrysler untied its nine-year partnership with Chrysler by selling an 80.1 percent stake in the company to Cerberus. Chrysler had an option to use the loan within a year. Daimler will provide $1.5 billion of the loan, with the rest comling from Cerberus.
A Chrysler spokeswoman had no immediate comment on what the money would be used for and why it was drawn at this time.
But surging oil prices and a slump in sales have exposed the weakness of Chrysler’s position and its reliance on trucks and sport utility vehicles and the U.S. market. By some measures, Chrysler faces even deeper problems than its larger rivals Ford Motor and General Motors, which have been able to use overseas earnings to cushion the blow from the downturn in U.S. sales this year.
Chrysler’s U.S. sales are down 19 percent so far this year - the largest drop for any of the three major automakers.
Chrysler’s position has raised questions about Cerberus 7.4 billion bet on Chrysler. Some analysts have said that the private equity firm should partner up in order to ride out the downtur. For its part, Cerberus says that its investment is solid and that it remains too early to judge Chrysler’s performance.