Chrysler finds itself in the midst of a small dilemma: What to do about the PT Cruiser?

Insiders are debating how big the next-generation model should be – and likely exactly how the retro-styled hatchback should look.

“It’s hard,” says Frank O. Klegon, executive vice president-product development at Chrysler. “You have a retro vehicle – and how do you update a retro vehicle?”

The PT Cruiser has been a solid hit since it first was unveiled at the Detroit auto show in 1999.

With a look that hearkened back to a late-’30s Ford, the PT featured more than just style. Its innovative-for-its-day interior, with flexible, fold-down seating and clever storage compartments, was meant to be used.

Since its 2000 market debut, more than 775,000 PT Cruisers have been sold in the U.S., including 144,717 in its peak year of 2001. More than 1 million of the vehicles have been built.

With the exception of a convertible rolled out in 2004, nothing too dramatic has been done to the vehicle since its launch. Chrysler threw in a turbocharged engine option in ’03 to address a power shortage and periodically added some pizzazz via 11 limited-run editions, such as the screaming yellow Route 66 variant that bowed in August.

For ’06, Chrysler tweaked the interior, with a new instrument panel, steering wheel, center stack and seats. As a result, the PT Cruiser enjoyed its third-best year ever last year, with sales of 133,740, and deliveries are up 3.1% so far in 2006.

Still, it is time for an update, with the ’08 model year the likely target.

And that’s what seems to have executives in a bit of a quandary.

Klegon says Chrysler has two choices, go with the new Dodge Caliber platform, which features all-wheel-drive and a mileage-enhancing continuously variable transmission, or opt for a slightly bigger platform that will underpin replacements for the Dodge Stratus and Chrysler Sebring that bow later this year.

“That’s the big debate right now, which one of those is the next PT Cruiser platform?” says Klegon. “It’s just a matter of what’s the package, what size vehicle is the next PT Cruiser?”

Chrysler doesn’t say it, but it is possible more than one “People Mover” could come out of the Toluca, Mexio, PT plant that is undergoing a $1 billion makeover: a small retro PT Cruiser and, perhaps, a slightly bigger, more modern-looking vehicle.

Vance Lausmann, a happy PT owner in Duluth, GA, is one buyer who would like to see more than one model. He suggests a standard PT; a longer-wheelbase version that would expand cargo room; and a pickup with foldable sides that turn the PT into a flatbed truck.

“We bought one of the first Cruisers in 2000 and now have about 47,000 miles (75,637 km) on it,” Lausmann says. “It handles taking the dogs to the vet and picking up things from Home Depot.

“While we're not ‘Cruiser cultists,’ we really like the car,” he adds.

“Please tell Mr. Klegon not to screw it up.”

dzoia@wardsauto.com