Chrysler Group LLC could launch an initial public offering for its shares as soon as next year, says CEO Sergio Marchionne.

He tells reporters the company is obliged to give the union-run retiree healthcare trust that owns 67.7% of Chrysler the opportunity to sell its shares to the public. General Motors Co., which emerged from bankruptcy in July one month after Chrysler, has said it could launch an IPO as soon as late this year.

Marchionne says Chrysler continues to generate a modest amount of cash—a closely watched measure as the company tries to maintain viability until new vehicles based on alliance partner Fiat SpA start to arrive in a few years. Chrysler said in November it had $5.7 billion in cash, compared with the $4 billion when it emerged from bankruptcy in June. Marchionne says the cash position now is “less than $6 billion.”

Toyota Motor Corp. confirms it plans to roll out a line of hybrid-only vehicles under the Prius name, starting with a compact car based on the FT-CH hybrid concept unveiled yesterday at the North American International Auto Show.

The concept is 22 inches shorter than the revamped Prius hybrid sedan, which has grown to become a midsize car. Toyota says the production version of the FT-CH would be less expensive than that car, which starts at $22,400.

Ford Motor Co. says it will spend an additional $450 million to design and assemble lithium-ion battery packs, produce hybrid transaxles and retool a Michigan assembly plant to build hybrid vehicles.

The company plans to begin producing a next-generation hybrid car and a plug-in hybrid car—both based on the revamped Ford Focus compact unveiled yesterday—at a former SUV plant in 2012. The investment is in addition to the $550 million Ford previously agreed to spend to retool that factory to begin building the revamped Focus sedan later this year. Production of an all-electric version of the car will follow next year.

The company says it is still scouting several sites in Michigan for the battery factory. Delphi Holdings LLP currently assembles batteries for Ford hybrid vehicles in Mexico. The hybrid transaxles will be made at Ford’s Sterling Heights, Mich., transmission plant beginning in 2012. Ford says the various projects will add 1,000 jobs.

A federal bankruptcy judge has approved the outline of Metaldyne Corp.’s reorganization plan over the objections of the company’s landlord, Bloomberg News reports.

The news service says Dyne LP, which owns Metaldyne’s headquarters in Plymouth, Mich., and several other facilities, contested the plan at yesterday’s bankruptcy court hearing. Dyne says the plan wouldn’t repay enough of its claim and vows to fight the confirmation of the plan at a Feb. 23 hearing.

Federal pension insurer Pension Benefit Guarantee Corp., which has a $157 million claim for unfunded pension benefits, withdrew its objections to the reorganization plan yesterday, Bloomberg says. PBGC agreed last year to take over Metaldyne’s pension plan for 10,800 employees.

The reorganization plan includes the sale last October of most of the company’s assets to a creditor group led by Washington, D.C.-based private equity firm Carlyle Group and New York City-based investment adviser Solus Alternative Asset Management LP.

The group paid $40 million in cash, assumed $32 million in obligations and forgave $425 million of secured debt, much of which was held by Carlyle. The sale was upheld by a U.S. district court late last year. Metaldyne filed for Chapter 11 in May.

Fitch Ratings has hiked its issuer default rating for Ford Motor Co. and its finance arm Ford Motor Credit Co. by two steps to a level six notches below investment grade.

The ratings agency cited a stronger economy and improvements in Ford’s pricing, costs, margins and liquidity. Fitch expects Ford to outperform the U.S. market in the next few years because of strong products and new technology.

Fitch expects Ford to begin generating positive cash flow this year as auto demand increases. If the U.S. auto market increases to 12.5 million vehicles next year from 10.4 million in 2009, the agency says Ford’s free cash flow could reach $4 billion-$5 billion. Fitch adds that Ford Credit has improved its access to the capital needed to make loans to consumers and dealers.

Fitch’s move follows similar actions last fall by rivals Moody’s Investors Service and Standard & Poor’s Ratings Services. Ford CFO Lewis Booth tells Bloomberg News the company still needs “some time” to regain an investment-grade rating on its debt.

Ford Motor Co.’s Fusion hybrid midsize sedan was named 2010 North American Car of the Year, and the company’s Transit Connect small commercial van was chosen as truck of the year by a jury of 49 automotive journalists in the U.S. and Canada.

The Fusion hybrid, which garnered 241 votes, outpolled the Volkswagen Golf/GTI compact car (146 votes) and the Buick LaCrosse midsize sedan (103). The Transit Connect won with 213 points over the Chevrolet Equinox (183) and Subaru Outback (94) midsize crossover vehicles.

This is only the third time in the 17-year history of the awards that one company took both titles. Honda Motor Co. won both awards in 2006 and General Motors Co. did so in 2007. Ford’s F-150 fullsize pickup truck took home truck of the year honors last year.

Chrysler Group LLC will decide later this month whether to file a lawsuit to challenge a new federal law that allows dealers whose franchises were terminated last year by Chrysler and General Motors Co. to submit their claims for reinstatement to binding arbitration, says Automotive News.

Chrysler CEO Sergio Marchionne tells the newspaper that the law passed by Congress last month is unfair to the company, which scrapped the contracts of 789 dealers during bankruptcy last spring. He says Chrysler will wait until the Jan. 25 deadline for dealers to file arbitration claims to see how many dealers apply before deciding whether to sue.

Chrysler said last month it would follow GM’s lead on whether to challenge the law, according to AN. But as GM sounds more conciliatory about taking back some of the 1,100 dealers it rejected, Marchionne now says Chrysler might sue on its own.

Volkswagen AG sold a record 6.29 million vehicles worldwide last year, up from 6.23 million in 2008, thanks to scrappage schemes in Europe and booming sales in China.

The company boosted its global market share by 1.1 points last year over year to 11.4% Demand surged 37% in China, VW’s largest market, to 1.4 million units, and 18% in Germany to 1.2 million units. In Brazil, the company’s third-largest market, sales jumped 9% to 688,000 units.