DaimlerChrysler AG's (DCX) Chrysler Group is planning to increase its annual production capacity by as much as 43 percent by next year, a spokesman said Friday.

The move is in contrast to General Motors Corp. (GM) and Ford Motor Co. (F), who are in the midst of restructuring plans designed to cut their North American production capacity.

Chrysler won't build new plants or hire more workers, spokesman David Elshoff said. But it is upgrading existing facilities so they are capable of producing more vehicles and can shift between different types of vehicles.

The third-biggest U.S. automaker expects to have annual production capacity of 3.5 million to 4 million vehicles by 2007, Elshoff said. Chrysler's total production in 2005 was 2.8 million vehicles. Actual production will depend on market demand, Elshoff said.

The upgrade will cost several billion dollars. Chrysler recently announced plans to invest $1 billion in two plants near St. Louis and recently completed a $419 million renovation of a plant in Belvidere, Ill., that builds the Dodge Caliber, the replacement for the Dodge Neon.

Chrysler sales were up 5 percent in 2005, a bright spot in the U.S. auto industry. The two biggest companies, GM and Ford, both reported sales declines of 4 percent.

Chrysler has 13 plants in North America that were running at 90 percent of their full capacity in 2004, according to the most recent Harbour Report, which measures plant productivity. A plant at 100 percent capacity has two eight-hour shifts per day.

GM and Ford were running at around 85 percent capacity. Toyota Motor Corp. was the only automaker in the survey with North American plants running at full capacity.

DaimlerChrysler shares were down 4 cents to $53.51 in early afternoon trading on the New York Stock Exchange.