More stories related to 2005 NAIASDETROIT – As a result of continued strong demand for its hugely popular Hemi 5.7L V-8, Chrysler Group says it will invest an additional $70 million at its Saltillo, Mexico, engine plant.

The investment should help boost output of the Hemi from approximately 480,000 units to 520,000 units once the investment is completed in 2006.

Plans also call for Chrysler to boost output of Hemis equipped with the Multi-Displacement System (MDS) cylinder-deactivation system from the current 20% rate to as much as 80%, depending on demand.

While there will be a “a little bit” of new brick and mortar erected at the plant to accommodate the additional output, most of the capacity increase will come from throughput improvements, Frank Ewasyshyn, executive vice president manufacturing-Chrysler Group, tells Ward’s in a interview at the North American International Auto Show.

“We are making the investments that we can make to break the bottlenecks,” he says. “We’re really looking at the operations within each process (for productivity improvements).”

The MDS output increase is the direct result of better-than-expected demand for the fuel-saving system. MDS currently is used on Hemis installed in the Chrysler 300C, Dodge Magnum and Jeep Grand Cherokee and will be used in the upcoming Dodge Charger and Jeep Commander.

The auto maker is working with its suppliers to boost MDS availability by the 2006 deadline.

Dodge Rams equipped with Hemi V-8s do not feature MDS, but sources within the auto maker tell Ward’s the technology could be optional for Hemis in light-truck applications as soon as 2006.

Later this year, Chrysler will introduce a high-performance, 6.1L Hemi that produces 425 hp. That variant will not feature MDS, Chrysler says.

Chrysler marketing chief Joe Eberhardt admits the auto maker “underestimated” the demand for Hemis equipped with MDS. The auto maker says the Hemis overall take rate currently stands at 46%.

kekelly@primediabusiness.com