Dieter Zetsche, chairman of the management board of Daimler and head of the company's Mercedes-Benz unit, spoke here Thursday at a media roundtable. He ran Chrysler when it was owned by Daimler.

The companies had an acrimonious divorce in 2007, when Daimler essentially gave 80.1% of Chrysler to private investment firm Cerberus Capital Management to be rid of it, after paying $36 billion for it in 1998.

Nonetheless, Zetsche said, "I continue to be emotional about this company and am crossing my fingers for the very best future."

Sergio Marchionne hasn't asked for advice, Zetsche says. But if he did, Zetsche would tell him that in spite of emphasis on consuming less fuel, "I would not focus exclusively on small cars going forward. I do believe the successful continuation of SUVs and larger cars is necessary."

Zetsche says he believes they're needed, not just for Chrysler and Fiat to succeed in the U.S., but for other automakers, too. They tend to be more profitable and, unless fuel prices in the U.S. zoom far higher, they remain popular. Many also are getting more fuel-efficient.

Zetsche's other observations about the U.S. auto market:

•Mercedes might begin building its compact C-Class cars at its Alabama factory to escape the pressures of mercurial currency exchange rates. The U.S. dollar lately has been weakening, which works against a company that develops and manufactures vehicles in euros but has to sell them for a price in dollars that it can't raise too high.

Exchange rates will have a lot of influence on "the decision for where to produce the new C-Class," he says. "It plays a role in whether we would put some of the C-Class production in" the U.S. plant. Currently, it makes Mercedes-Benz SUVs.

•U.S. sales should rebound about 10% to 11 million or so next year.

•Mercedes has no plans to drop its tiny Smart car here despite tumbling sales. Zetsche says Smart was popular both as a fuel-economy car and a lifestyle car, but the recession has kept away lots of potential buyers.

He says a four-passenger model for the U.S. is under consideration.

•Daimler doesn't plan to bring the current small Mercedes A-Class to the U.S. but will develop four variants of the next-generation A-Class, some of which likely would be offered in this market.

"We will have four very different types of vehicles based on the next-generation (A-Class platform), and we will have products very well suited to the tastes and demands of American consumers."

He didn't give a timetable or any details about the four vehicles and how many would come to the U.S. They will not cannibalize Smart sales, he says, because the larger A-Class vehicles "are in different categories."

•More diesels and smaller-displacement gasoline engines are certain, he says, because of fuel-economy regulation and buyer demand for better mileage.

But they won't necessarily be in very small cars, he says, because technology can make the engines powerful enough and smooth enough to replace bigger engines, especially in luxury cars with enough profit margin to pay for such advanced technology.

Enlarge By Hannelore Foerster, Bloomberg News Former Chrysler CEO Dieter Zetsche says he's crossing his fingers that Chrysler has "the very best future."