Leading position in the relatively recession-resistant luxury-vehicle industry, despite the ongoing restructuring activities at Mercedes Car Group; Strong profit contribution from Financial Services division; Broad product and geographic diversity in the automotive industry; Moderate financial leverage; and Above-average financial flexibility. Chrysler's vulnerability to the challenging U.S. market conditions will lead to significant third-quarter 2006 losses; Massive expenses and cash outlays required for the restructuring of the smart brand within Mercedes Car Group; Expected cyclical downturn of the global commercial-vehicle industry in 2007 will dampen the profitability of DaimlerChrysler's Trucks division; and Burdensome unfunded pension and retiree medical liabilities. The ratings on Germany-based automaker DaimlerChrysler AG reflect the broad product and geographic scope of its automotive operations. Over the past year,
