Chrysler Group LLC is working to raise the resale value of its vehicles, seeking to replicate its effort with the redesigned Jeep Grand Cherokee, to increase revenue from leases and improve the company’s image, Bloomberg reported.

Changes from the previous model and Chrysler’s volume and pricing strategy boosted the residual value of the Grand Cherokee’s four-wheel-drive version to 45 percent in the third quarter from 35 percent a year earlier, according to researcher ALG Inc. Residual values are projected resale values that determine buyers’ monthly lease payments.

Chrysler used testing that simulated three years of use while developing the Grand Cherokee to make it more reliable, and the vehicle’s third-quarter deliveries rose 35 percent, with a higher percentage coming from leases. The automaker is working to repeat that success with 15 other new or refreshed models, most of which begin production late this year.

“Beyond any shadow of a doubt, the leasing factor on the Grand Cherokee is the reason it’s having an outstanding sales rate,” said Dan Frost, a Chrysler dealer in suburban Detroit.

The Grand Cherokee’s percentage of sales from leases climbed to 25 percent in September from 2 percent in the same month last year, according to Edmunds.com.

Chrysler last week reported its best quarter since emerging from bankruptcy and raised its 2010 forecast. The third-quarter net loss narrowed to $84 million, and net revenue rose 5.2 percent from the second quarter to $11 billion, driven by Grand Cherokee sales, Chief Financial Officer Richard Palmer said.

The percentage of sales from leases on Chrysler’s four brands this year increased to 11 percent from 2.6 percent in 2009, while still trailing the industry’s 21 percent, according to Edmunds. Chrysler’s overall residual values rose to 50 percent in September from 36 percent a year ago, according to CNW Research. The industry average in September was 76 percent.

“We obviously make money leasing vehicles,” Palmer said on a Nov. 8 conference call. “The residual values on our vehicles are improving, especially as we improve, as we introduce the new products. So we expect that to grow.”

The new or refreshed vehicles include the midsize Chrysler 200 sedan, Dodge Durango and Fiat 500.

Resale value predictions haven’t yet been computed for most of Chrysler’s new vehicles, Fernando Ubeda, ALG data analytics manager, said in an e-mail this week.

Chrysler’s residual values had been hurt, in part, by last year’s uncertainty around the company, Jim Morrison, the head of Jeep product marketing, said in an interview in San Antonio in late October. Chrysler emerged from bankruptcy in June 2009 under the control of Fiat SpA.

None of Auburn Hills, Michigan-based Chrysler’s vehicles scored above average in Consumer Reports’ annual reliability survey released last month. Twelve of the 20 Chrysler models for which enough data were available for a rating scored below average, the magazine said.

The U.S. automaker spent extra time in the past year trying to improve the Grand Cherokee’s resale value, believing it would help drive sales through better leasing, executives said in interviews last month. As part of its increased testing, the company had 72 Jeeps driven nonstop for 36,000 miles, which represents about three years of use, said Philip Jansen, chief engineer on the Grand Cherokee.

“You start to see any issues,” he said. “It really helped just kind of pull out stuff that historically we would not have found for three or four months into production.”

The automaker met with ALG in March about plans for the vehicle, including specifications and production plans, then returned in May with the new Jeeps, Morrison said.

“After getting a chance to drive it, we felt the changes put the Grand Cherokee in a better competitive position,” Ubeda said in an e-mail explaining the Santa Barbara, California-based firm’s higher rating.

Chrysler is making similar efforts to win higher residual value ratings on the new vehicles, Morrison said.

“It’s really just good communications,” Morrison said. “We’ve mirrored it for all of the rest of the brands.”

The new Grand Cherokee began production in May and full volumes started arriving in showrooms during the third quarter, Chrysler officials said.

“I’ve never seen a product have this kind of sort of support from people who are in the business of evaluating vehicles,” Sergio Marchionne, chief executive officer of both Chrysler and Fiat, said on a conference call.

General Motors Co. may sell next week’s initial public offering above the forecast price range and exercise an option to increase the size of the IPO amid signs of brisk demand, two people familiar with the deal told Bloomberg.

The reception six GM executives have received from investors on this week’s roadshow to promote the IPO has been strong enough to sell the shares at the high end of the $26 to $29 offering range or above $30, said the people, who asked not to be identified because the information is private. SAIC Motor Corp., GM’s partner in China, will probably be among the buyers, three people familiar with the plans said.

GM will probably exercise its so-called greenshoe or overallotment option, granting underwriters 54.8 million more shares, the people said. That would help the U.S. Treasury Department recoup more of the public’s $49.5 billion investment in the Detroit-based automaker. Strong demand for the IPO may also help secure higher prices when the U.S. sells the rest of its shares in later offerings.

Noreen Pratscher, a GM spokeswoman, declined to comment.

The offering of 365 million shares, or 24 percent of the automaker’s stock, is already multiple times oversubscribed, one of the people said. Banks arranging the sale will continue to take orders until the roadshow ends next week, to avoid the perception that any potential investors were crowded out, the person said. GM is scheduled to price the IPO on Nov. 17.

The automaker is getting orders from large institutional investors who are likely to be long-term shareholders at about $32 a share, one of the people said. About 15 percent to 20 percent of the offering will be allocated to individuals, the person said.

GM’s stockholders may sell about $2 billion in shares to sovereign wealth funds in the Middle East and Asia in allotments of about $500 million, the person said.

Joe Phillippi, a principal of consulting firm AutoTrends Inc. in Short Hills, New Jersey, said the fact that the IPO was being sold to institutional investors was a good sign for taxpayers because it means GM is finding eager buyers without having to aggressively market the stock to individuals.

“They only stuff the stock into retail when the deal is going bad,” Phillippi said.

Large institutions are likely to hold the stock longer than hedge funds or individuals, meaning that they won’t sell quickly and put downward pressure on the shares, he said.

The offering comes 16 months after GM emerged from a U.S.- backed bankruptcy. The company reported third-quarter net income of $2.16 billion this week, bringing the automaker’s earnings this year to $4.77 billion. That tops the $4.46 billion profit by Toyota City, Japan-based Toyota Motor Corp., according to data compiled by Bloomberg.

The Standard & Poor’s 500 Index has climbed to a two-year high this month amid signs that the U.S. economy won’t slip back into a recession after the longest contraction since the Great Depression.

“They left enough money on the table that money managers think there is some real upside,” Phillippi said. “GM had a good third quarter.”

Without exercising the greenshoe, the Treasury Department’s stake would fall to 43 percent from 61 percent now, according to a regulatory filing with the Securities and Exchange Commission. If the overallotment option is used, the stake would drop to 41 percent, according to the filing.

SEOUL — Negotiations between the U.S. and South Korea to revive a stalled free-trade deal still faced significant hurdles early Thursday as the countries neared a deadline imposed by U.S. President Barack Obama, who is hoping to use the pact to jump-start his trade policy.

Trade negotiators from the two countries have been working all week to resolve the disputes before a meeting scheduled for Thursday afternoon between Obama and South Korean President Lee Myung-bak, reported The Wall Street Journal.

But shortly before that meeting, White House officials cautioned that the talks remained stuck on what U.S. negotiators see as unfair environmental standards designed to keep American automobiles out of South Korea.

A failure now would be a major embarrassment for Obama, who has made boosting exports a major economic cause—and has redoubled his export initiative in the wake of this month’s historic Democratic election defeats.

The two presidents were scheduled to appear at a press conference Thursday afternoon in Seoul, and Obama may have no choice but to declare the two sides will keep negotiating until a deal is reached.

“As we have said previously, if we can reach the standard for a fair trade agreement that the president has set out on, particularly, autos, we will move forward,” White House spokeswoman Amy Brundage said. “We hope to continue making progress.”

The two countries forged a free-trade deal in April 2007 after a year of talks. It was designed to expand their two-way trade, which amounted to about $70 billion last year. Most analysts said the U.S. trade deficit with South Korea, which was about $10 billion last year, would narrow as a result of the deal.

But in the United States, automakers and beef farmers complained the deal didn’t go far enough to open up the South Korean market. The deal languished as the Bush administration didn’t feel confident it could win ratification for it in the Senate.

Over the past week, U.S. trade negotiators pressed South Korea to change some of its nontariff barriers in the auto sector, specifically regulations on fuel efficiency and emissions that are a hodgepodge of American and European standards that force auto makers in both regions to adjust their vehicles for sale in South Korea.

South Korean Trade Minister Kim Jong-hoon told reporters earlier this week that he was willing to deal on autos, but he insisted the Korean standards are based on environmental considerations.

Imports account for about 6 percent of South Korea’s market of about 1.1 million annual unit sales. That is up from 3.5 percent in 2006, but still well below levels seen in other advanced economies.

In the U.S., Ford Motor Co. has been the loudest opponent of the deal, even taking out full-page newspaper ads against it. Ford sells about 4,000 cars a year in South Korea, the most of any U.S. brand, although General Motors Corp. owns a majority stake in South Korea-based Daewoo Motors, which has about 9% of the market.

In the final hours before a deal was due to be announced, Ford was holding firm to its position that any deal would have to provide greater certainty that South Korea wouldn’t continue to erect barriers to U.S. cars in the form of changing regulations. As talks drew to the wire, Ford declined to comment on any potential progress, saying the landscape could still change.

U.S. and South Korean negotiators reached the original deal in April 2007 under the deadline pressure of the looming expiration of the Bush administration’s fast-track negotiating authority, in which it could present a completed deal for Congress to approve or reject but not modify.

Analysts said a deal would likely boost two-way trade, which has been in the $70 billion to $80 billion range for the past few years, by 10 percent to 20 percent over five years. South Korean politicians and the public embraced the deal immediately, chiefly because it was portrayed in the country’s media as a “win” despite the prospect that its trade surplus with the U.S. would shrink. The deal exempted South Korea’s rice industry from U.S. competition, adding to the Korean perception of a win.

That strong public sentiment, however, made it difficult for South Korean authorities to agree to discuss modifications. Negotiations have been complicated by perceptions in South Korea that its government might be giving in to pressure from the United States.

Complimentary maintenance will be standard with any purchase of a 2011 model-year Lincoln, Ford Motor Co. announced.

Ford introduced the Lincoln Complimentary Maintenance Program last summer as a trial promotion on select vehicles. The feature will be permanent for all Lincolns going forward, reported The Detroit News.

It is part of the effort to create a luxury experience around the purchase of a Lincoln. The Dearborn-based automaker is phasing out the Mercury brand and is working to enhance Lincoln and further differentiate it from the Ford brand.

“We are redefining the Lincoln customer ownership experience,” said C.J. O’Donnell, Lincoln group marketing manager. “Lincoln Complimentary Maintenance is just one example of Ford Motor Company’s commitment to elevating the Lincoln brand and experience.”

The program augments Lincoln’s warranty and transfers to a second owner if the car is sold.

Regular maintenance such as oil and filter changes, tire rotations and multipoint inspections for up to eight service visits are complimentary.

Some Lincoln-Mercury dealers are closing with the loss of Mercury and others are choosing not to continue to sell the brand after learning of the investment Ford wants as it works to elevate the status of its dealer network. The amount each dealer must invest to meet new standards varies by dealership.

The automaker plans to introduce seven all-new or significantly refreshed vehicles in the next four years.

Ford wants Lincolns to be distinguishable for their EcoBoost engines and technology.

The current lineup includes the MKS large sedan; MKT fullsize crossover; MKZ midsize sedan including a hybrid version and the MKX midsize crossover.

WASHINGTON — The Michigan lawmakers who lead the powerful House Ways and Means committee warned that efforts to salvage a U.S.-South Korea trade deal will succeed only if it addresses what they called “the dangerously lopsided trade in automotive vehicles,” The Wall Street Journal reported.

Michigan Reps. Sander Levin, the Democrat currently chairing the House Ways and Means committee, and Dave Camp, the Michigan Republican who is expected to take over as chairman in the next Congress, said in a joint statement Thursday that further talks with South Korea “will succeed only if South Korea adopts concrete steps to open its market to U.S. exports.”

“While there are other unresolved issues, nowhere is this more evident than in the dangerously lopsided trade in automotive vehicles,” the lawmakers said.

The lawmakers’ comments came hours after President Barack Obama and South Korean President Lee Myung-bak said their negotiators had failed to agree on revisions to a proposed bilateral trade opening deal that’s been languishing since 2007.

The lawmakers’ statement echoes concerns expressed by Detroit auto makers Ford Motor Co. and Chrysler Group LLC, along with the United Auto Workers. The Ways and Means committee would be among those with jurisdiction over the agreement should Mr. Obama try to move it forward.

Separately, a leading U.S. business group said it would “pull out all the stops” to lobby for quick passage of a deal.

The U.S. Chamber of Commerce said in a statement it was “disappointed” at Thursday’s outcome but believes progress has been made and differences “narrowed.”

“We urge both presidents to direct their ministers and staff to resolve remaining details with the greatest possible speed and urgency,” the Chamber said. “Time is of the essence. American jobs are on the line.”

The Chamber said that with the imminent implementation of a trade deal between South Korea and the European Union, the U.S. could lose 340,000 jobs without its own deal in place.

“The Chamber is ready to pull out all the stops to explain the benefits of this agreement to the American people and help move the pact through Congress,” the statement said. “The sooner we get this deal done, the sooner it will start creating new American jobs.”

Lori Wallach, a trade expert at government watchdog group Public Citizen, a skeptic of the original U.S.-Korea pact proposed during the George W. Bush administration, called on Obama to ensure the deal wouldn’t lead more U.S. companies to move operations overseas, costing American jobs.

PARIS — September, when this glamorous European capital is buzzing, is an exciting time to be in the City of Lights. For Ford CEO Alan Mulally, it was an especially good year, CNBC reported.

In a city where U.S. products are often treated with disdain, Ford was the toast of the annual Paris Auto Show. As the man in the driver’s seat, Mulally was greeted as a rock star for engineering one of the biggest turnarounds in the auto industry’s history.

“Today Ford is in a different place,” he told a group of press and Ford executives at the Parte de Versailles exhibition hall. “(We’ve) returned to profitability faster than we had forecast.”

That road to profitably has been extremely bumpy for Mulally and the iconic American company. When he took the wheel in 2006, Ford was veering badly off track – losing a staggering $17 billion that year alone. Its U.S. operations were bleeding cash. The company was struggling to absorb a string of acquisitions that included Aston Martin, Jaguar, Land Rover, Mazda and Volvo.

One of Mulally’s first decisions was to bring a small group of Ford executives to the test track run by Consumer Reports, whose annual ratings influence millions of U.S. car buyers. Mulally and his team got a blunt assessment of Ford’s quality.

“I wouldn’t have touched a Ford vehicle eight years ago,” said David Champion, Consumer Reports’ director of automobile testing.

What followed were brutal, high-level meetings in a command center one floor below Mulally office – a place known as the Thunderbird Room. It’s where Ford’s top executives meet to review the company’s operations and flag problems. When Mulally arrived in 2006, no one dared admit anything was wrong. That would soon change.

At a meeting to review the launch of a new model crossover SUV, the Edge, Mark Fields, head of Ford’s Americas division, had some bad news. There was a problem with one of the hydraulic parts that would force a delay of the launch for a couple of weeks.

The room “got deathly quiet,” Mulally recalls. And then the company CEO started applauding.

It was a defining moment — a small gesture signaling an enormous change. Almost immediately, other executives felt free to admit they, too, had problems.

Mulally’s solution was a plan he called “One Ford.” To fix the company, he would slash Ford’s North American workforce by 40 percent and sell its subsidiaries. Ford would accelerate development of new products, redesigning the Taurus, Focus and Fiesta models, while cutting dozens of older models, including the Crown Victoria and jettisoning the entire Mercury brand.

“You just can’t be world class on 97 different things,” he said. “Plus, we had different production systems for each of those brands and each of those models.”

Mulally’s plan was ambitious and would cost far more money than the company had on hand. So in November 2006, Ford management rolled the dice and mortgaged nearly every asset the company owned — even the signature blue oval — to borrow the cash.

“I’ll never forget walking into the Waldorf Astoria – 520 bankers all looking at their cufflinks and listening to our plan to create a viable Ford.” He said. “And within two weeks we had raised $23.5 billion.”

It was a colossal gamble. But two years later, when the economy crashed in 2008 and plunging car sales left showrooms empty, Ford had enough cash to ride out the storm. General Motors and Chrysler staggered to Washington to plead their case to Congress for taxpayer-funded lifelines. Mulally went to the Capitol to support his competitors — because if GM and Chrysler went out of business, dozens of suppliers might follow, dragging Ford down with them.

The hearings, he later told a meeting of Ford car dealers, were “surreal.” Both Chrysler’s then-CEO Robert Nardelli and General Motors then-CEO Rick Wagoner enthusiastically agreed to accept a dollar-a-year salaries in exchange for the bailout.

“So they got to me and they said, ‘What about you, Mr. Mulally, would you work for a dollar a year?’” he recalled. “I thought about it and I said, ‘No, I think I’m OK where I am.’”

Refusing that government bailout delivered Ford an unexpected and priceless advantage that dealers saw right away. Riding that wave of good will, Ford rebounded.

After bottoming in early ’09, sales took off. By that summer, Ford was posting sales gains among the best in the industry. Customers returning to Ford showrooms found something else — improved quality.

By 2010, Consumer Reports — which had pummeled Ford a few years earlier — had elevated several models near the top of its lists.

For now, Mulally is on a roll. But it’s not something he can take for granted.

The United Auto Workers may want to reclaim concessions they made when the car industry tanked. And sooner or later, Ford will face new competition from the more than 40 auto manufacturers in China.

But having steered the company back from the abyss, Ford’s CEO has a moment to savor.