Chrysler halts hybrid production

In a blow to the US auto industry's attempts to remake itself as a provider of greener vehicles, troubled manufacturer Chrysler has halted production of its only hybrid vehicles, the Durango and Aspen, citing poor sales.

The cars are produced at a factory in Newark, Delaware factory that the company said will close at the end of this month after US sales in September dropped dramatically.

"It's not a sound decision to keep open the plant for the hybrid demand alone," the company said in a statement.

Chrysler began promoting the hybrid vehicles in the middle of the year when record oil prices were driving US consumers towards hybrid vehicles.

But oil prices have since dropped and sales have fallen by 54 per cent for Durangos, and by 21 per cent for Aspens.

The company – which is in merger talks with GM – will now not produce another hybrid vehicle until at least 2010.

However, supporters of hybrids and more fuel efficient vehicles will argue that the decision is the result of Chrysler's late entry to an already crowded hybrid market, as opposed to weakening demand across the sector.

Chrysler's Durango and Aspen models were competing against GM's hybrid Chevrolet Tahoe and GMC Yukon, as well as more established models in the Toyota Prius and Honda Civic.