Chrysler product development chief Frank Klegon told Reuters that the company was pushing ahead with new diesel and hybrid vehicles. Chrysler had been seeing its market share fall while Honda and Toyota's more fuel efficient cars gained popularity, but the company and its army of lobbyists continued to proclaim that making fuel efficient cars wasn't feasible.

Now with new owners Cerberus Capital Management calling the shots, the company is building on its plans to offer hybrid vehicles with new enthusiasm for gas electric and diesel vehicles. The company is developing dual-mode hybrids that adapt to city and highway driving, as well as a new four-cylinder diesel model.

In a reversal, the company recently testified before Congress that fuel efficiency wasn't possible, but now that Congress will likely require raising the bar, Chrysler says it can in fact build competitive cars.

Chrysler's Klegon said hybrid and diesels could be 30 percent of the market. If Europe can be 50 percent or more diesel (which requires less oil to produce, helping the environment on the refining side as well), then the U.S. can certainly reach 30 percent.