Dieter Zetsche engineered a turnaround at Chrysler with a laserlike focus on creating new products and reducing costs.

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DETROIT — Dieter Zetsche engineered a turnaround at Chrysler with a laserlike focus on creating new products and reducing costs. When he takes control of parent DaimlerChrysler later this year, he’ll surely keep those strategies in place as he deals with challenges such as weak earnings at Mercedes-Benz and limited growth in Asia, analysts say.

DaimlerChrysler announced yesterday that Zetsche, 52, will take over for Chief Executive Juergen Schrempp at the end of this year. Chrysler No. 2 Thomas LaSorda will replace Zetsche as president and CEO of the Chrysler Group.

DaimlerChrysler shares soared $4.29, or 9.8 percent, to close at $48.26 yesterday.

Schrempp is a onetime apprentice mechanic who engineered the controversial marriage of Daimler-Benz to Chrysler, a company he envisioned after the 1998 merger as a giant that could weather increasingly global competition.

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But the colossus stumbled, first at the Chrysler division, then with an ill-fated push into Asia and now at its luxury mainstay Mercedes. As Schrempp announced his resignation, the German-American company reported earnings crimped by troubles at the Mercedes-Benz unit.

Investors had long been impatient with Schrempp over the company’s stock price. As profits lagged, some shareholders became belligerent, decrying the company’s leadership and singling out the 60-year-old Schrempp for their ire.

At this year’s annual meeting, Schrempp was told to resign immediately and several key shareholder groups said they would withhold their ceremonial endorsement of the board and its plans.

Now those investors have their wish. Schrempp will step down Dec. 31, two years before the end of his contract. He doesn’t plan to seek a seat on the company’s supervisory board and won’t receive a salary beyond the end of the year.

Zetsche leaves a once-struggling division that has improved dramatically under his watch. Yesterday, Chrysler reported an operating profit of $658 million in the second quarter, its eighth consecutive quarterly profit at a time when larger U.S. rivals General Motors and Ford have struggled.

Chrysler’s revenue in the most recent quarter amounted to $15.8 billion, down slightly from $16 billion in the second quarter of 2004. Sales were up 4 percent in the United States and 3 percent worldwide, Chrysler said.

Zetsche told analysts during a conference call yesterday that it’s too early to say what his priorities will be at DaimlerChrysler, but industry observers say he’s likely to demand a renewed concentration on DaimlerChrysler’s core automotive business.

Erich Merkle, an analyst with IRN, said in addition to fixing quality problems that have prompted costly recalls at Mercedes, Zetsche could breathe new excitement into the luxury brand by promoting more radical designs, as he did with vehicles like the Chrysler 300C sedan.

Several analysts agreed Zetsche is the right person for the job. Zetsche and Nissan chief Carlos Ghosn are the two most sought-after executives in the auto industry, Merkle said.

George Magliano, director of auto research for Boston-based Global Insight, said Zetsche gained a reputation for working well with people at Chrysler after he was appointed CEO in 2000.

That doesn’t mean Zetsche isn’t a hard-nosed businessman. Since he announced a turnaround plan in February 2001, Chrysler has eliminated around 40,000 jobs and reduced costs by improving quality and trying to hold down incentive spending.

In late 2003, Zetsche launched an aggressive plan to introduce 25 new or redesigned vehicles over 36 months.

Information on Schrempp’s tenure provided by Associated Press reporter Matt Moore.