By David Schepp BBC News Online North America business reporter

At a recent press event in Detroit, Chrysler Group chief executive Dieter Zetsche worked behind a bar, serving drinks to a horde of fawning automotive journalists.

The easy smile he dished out with each beer might have left some with the impression the future at his car firm remains bright.

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Asian auto makers, however, are eating Chrysler's lunch, driving down the firm's share of the US market to just 12% in December, according to Ward's Auto Info Bank.

But it is not only shrewd Japanese and Koreans car makers causing Chrysler's woes these days. The competition is stiff among fellow Detroit firms as well.

Since 11 September, Chrysler, the US division of Stuttgart, Germany-based DaimlerChrysler, has also had to battle massive General Motors, which sparked a sales war with zero-interest loans and generous rebates in the wake of the terror attacks.

Such incentives allowed GM to push sales up 36% in December, while Chrysler gained just 1% last month, after it chose to forgo rebates and special financing.

Rebate debate

But now with the sales results in, Chrysler has said it will match GM's incentives, offering 0% interest on loans of up to five years on its larger vehicles, or a $3,000 rebate.

We see this as another example of auto makers pushing their structural problems into the future Gary Lapidus, Goldman Sachs

The auto maker made the announcement to join its domestic competition in offering the incentives on Tuesday at the North American International Auto Show in Detroit.

The decision is an about-face for Mr Zetsche, who has been critical of the numerous incentives GM, Ford and other small auto makers have offered over the last 14 months.

Chrysler, however, in a bid to stay competitive had little choice but to join its brethren in offering the incentives.

Stealing future sales

The firm also unveiled a financing scheme that would give buyers of certain models of minivans low interest loans for 72 months.

Six-year loans are unusual in the auto industry but are sometimes offered to those who otherwise could not afford a new car as the longer term allows for smaller payments.

But loans of such length concerns some analysts.

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"We see this as another example of auto makers pushing their structural problems into the future, offering consumers the opportunity to buy a new car without significantly increasing their monthly payments," said Goldman Sachs analyst Gary Lapidus in a research note.

While GM has offered rebates and special financing in hopes of making significant gains in market share, Chrysler's expectations are not as ambitious.

"We're shooting in '03 for about a half a share point or more gains," said Chrysler's head of sales, Jim Schrorer.

"We're confident we can show a bit better share performance [this year]," he said.

Chrysler's share of the US market for all of 2002 accounted for 13% of total sales.

New models

Chrysler, like Ford and GM, has taken a beating from Asian competitors thanks in part to a dated line-up of cars.

While Toyota and Honda are offering freshened family saloons, the Big Three continue to trot out dated models.

Chrysler sought to change that by premiering two new vehicles at the Detroit auto show to reinvigorate its car offerings, including the much-anticipated Pacifica, a sleek estate wagon that features all-wheel drive.

"After two years where we did not have a lot of bold new products, we're looking now... for the first time in years getting stuff out that we haven't had before," said Wolfgang Bernhard, Chrysler's head of operations.

Meanwhile, Mr Zetsche is keeping his eye on quality, hoping to best his domestic rivals in building better cars and trucks.

"It's too early to cry victory," he said, about his firm's fledgling efforts to improve quality.

"But it's an awfully good start."