First, the company is breathing new life into its existing lineup. Highlights include the redesigned 2011 Jeep Grand Cherokee, which the automaker started shipping to dealerships in early July, and the re-engineered and restyled Chrysler 300 and Dodge Charger rear-drive sedans, both coming in the first quarter of 2011.

Altogether, Chrysler says it is revising 16 vehicles starting this year. Most were in the pipeline before the automaker emerged from bankruptcy under Fiat management in June 2009.

The critical second phase starts at the end of this year when the Fiat 500 minicar arrives, followed by a wave of Chrysler, Dodge, Jeep and Ram vehicles based on Fiat platforms.

Chrysler's strength lies in large cars, pickups, minivans and Jeeps. CEO Sergio Marchionne has said those vehicles will remain the core of Chrysler's business. But the company's complete revival depends largely on smaller, more fuel-efficient Fiat-based vehicles.

The Grand Cherokee was the first vehicle to get Chrysler's Pentastar V-6 engine, developed before Fiat assumed management control. Eventually, the Pentastar engine family will replace seven V-6 engines in Chrysler vehicles, dramatically simplifying the powertrain picture.

The Fiat 500 will be the first North American car in the Chrysler-Fiat stable to get the 1.4-liter FIRE engine. The engine comes with MultiAir, a system that boosts fuel economy and performance.

MultiAir eventually can be deployed across most of Chrysler's engine families, including the 1.8-, 2.0- and 2.4-liter four-cylinder engines produced in Dundee, Mich.

A dual-clutch transmission developed by Fiat will boost fuel efficiency in Chrysler's front-drive vehicles. A new eight-speed automatic, developed by ZF Friedrichshafen AG, will help make Chrysler's rear-drive cars and SUVs more efficient and refined.

With Fiat's Compact and slightly wider Compact Wide platforms and new powertrains, Chrysler at last should have competitive small and mid-sized vehicles.