Chrysler's sales were down over the summer

The news comes a month after the firm, the US unit of German-American group DaimlerChrysler, admitted there was a glut of vehicles on its forecourts.

Chrysler said the price reduction was part of its wider restructuring work, but denied reports of plant closures.

The firm has already said there will be some temporary factory shutdowns.

'Back on track'

"We are now putting a plan together to put Chrysler back on track," DaimlerChrysler chief executive Dieter Zetsche said in an interview with the CNBC television channel.

"We first have an opportunity with eight new vehicle launches this year for the Chrysler Group, but we are also looking at the cost side."

Chrysler confirmed that a "handful" of executives from its sister company Mercedes-Benz had joined the study group looking at potential cost savings at the US unit.

Chrysler's falling sales are mirrored at its US rivals Ford and General Motors.

Collectively known as the "Big Three" US carmakers, they have all been plagued by an over-reliance on thirsty trucks and sports utility vehicles.