The CEO of Chrysler and Lancia in Europe disclosed that the company is planning to have a Lancia-Chrysler network of around 800 dealers and around 1000 dealerships by May next year.

The parent company of the brands, Fiat, notified the dealerships in all corners of Europe and informed them that contracts will be ending by May 31, 2011.

This will giveway to a new network of dealerships that will handle distribution and sales of the products of Lancia and Chrysler under the name of the former as created by Fiat. This will somehow benefit dealers since they will be able to market the full range of products.

The dealers which sell Jeeps will be re-branded as Jeep retailers while Dodge will play a role of a niche player importing muscle cars from the United States in small volumes.

The plan was unveiled by the VP for manufacturing of Chrysler, Scott Gaberding, who also revealed that they are considering several options on the drawing board. This also includes an option to build a brand new factory if necessary.

Chrysler is looking at the possibilities of using their plant in Windsor, Ontario, as well as their assembly lines in Mexico and the United States. The factory in Ontario serves for the production of Chrysler’s Town & Country, and the Dodge Caravan. If the plant will be re-organized and re-tooled for the production of the Fiat-based cars, it can help with the production of the MiTo under the Alfa Romeo brand. It can aid in the assembly of Chrysler vehicles using the C-Evo platform of Fiat.

The factory in Mexico being considered is doing the production of the Chrysler PT Cruiser and the Dodge Journey. As earlier announced, the PT Cruiser will be killed by Summer which can give way to the production of A platform Fiat vehicles using the facility. So the Mexico plant might roll out the likes of Fiat 500 or a new Jeep model derived from the Panda Cross.

The other plant in consideration is their assembly line in Belvidere, Illinois. Units like the Jeep Compass, Jeep Patriot, and the Dodge Caliber zoom out of this factory. Upon retooling, this one can help with the production of the Giulietta from Alfa Romeo and other Fiat models.

The CEO is expected to let the stakeholders and the public know about the 5-year plan of Chrysler by early November. The plan is expected to include selling shares to the public by 2011 and make the quarterly financial report of the company public by next year.

The move seems to get the nod from business analysts and the auto industry community. Some experts foresee Chrysler to report about $841 million in operating profit by next year but declare a net loss of about $169 million as 2010 ends. When 2011 comes, these figures will jump up to $2.45 billion in operating profit and a $952 million net income. Analysts say that these figures might be too good for Chrysler before but is very doable today.

Prior to Marchionne’s take over of the top post, Chrysler was listed as a private company under the Cerberus Capital Management Chrysler. Being a private company, it was not required to publish or release the details about its finances. Some reports are putting the losses at the $6.8 billion mark tracing it as recent as 2007. The company was able to get to a clean sheet after General Motors declared bankruptcy to resolve its problems.

The judge who ruled on the case cited no alternative to the bankruptcy but a fast liquidation of the assets to save the value of Chrysler. The move was opposed by certain consumer groups, an Indiana based pension funds firm, and about 789 Chrysler dealerships. These groups see the move as done in haste and that Chrysler is getting rid of dealerships unnecessarily.

In the wake of the take over, Chrysler was forced to abandon thousands of units in the assembly with engines and components also unfinished. Several plants were also closed down. The halt of the production leads auto experts to assume that there will be delays in the launch of important projects like the new Grand Cherokee of Jeep and the next gen Chrysler 300.

On the other side of the story, Italian car maker Fiat is set to market the 500 minicar in the United States dealerships of Chrysler. The launch is estimated to be 18 months from now.

Fiat executives clarified that the 500 minicar will be the only unit carrying the badge of Fiat. It is hoping to copy the success of BMW in relaunching the Mini several years back.

There are also plans for Chrysler to build units derived from the platform of Fiat. It was made clear that Fiat will not just rebrand their line-up to market in the US.

When Fiat brings in the Fiat 500 minicar, there is a buzz going around that it will be inevitable for the other car makers to compete with the small Italian car.