Dieter Zetsche, president of Chrysler, is expected to tell the board that the group's sweeping restructuring announced this year is delivering better-than-expected savings.

But he is also likely to warn that a prolonged decline in US consumer confidence would force the company to reassess its cost-saving targets, involving 26,000 job losses.

The company declined to comment on the agenda of the board. However, officials acknowledged that it would review the initial impact of the September 11 attacks, the implications for DaimlerChrysler sales and the pace of restructuring.

"The company is looking at these issues. There will be a careful examination of what [sales] traffic is like in the market place before adjusting forecasts for this year or next," said one executive.

The board will also discuss the outlook for its commercial vehicles arm Freightliner, where a restructuring is due to be announced next month. DaimlerChrysler refused to comment on reports that this would involve the closure of two plants in Portland, Oregon.

Chrysler's cost-cutting targets and timetable for returning to profit were based on a market share of 14 per cent in the US.

Although that share fell to 11.4 per cent in August, senior managers had expected a revival in the fourth quarter after the launch of the new Dodge Ram pick-up. Since the terrorist attacks, however, industry analysts have cut their expectations for new car sales.

JP Morgan, the US investment bank, has reduced its forecast for US vehicle sales to 16.1m units this year, compared with an earlier forecast of 16.6m and last year's 17.3m. The bank fears that 2002 sales could slide to 15.8m.

Such downgrades have contributed to falling share prices across the industry. DaimlerChrysler shares have tumbled almost 30 per cent from E43.45 to E30.80 in the past two weeks.

Weakening US demand could reduce Daimler Chrysler's operating profit, before restructuring costs, from E1.6bn to E1.2bn ($1.1bn) for this year, according to JP Morgan. Of that decline, analysts believe E300m will be due to lower earnings at Chrysler in the last quarter of this year.

Profit expectations for 2002 have been trimmed from a pre-exceptional E5.2bn to E4.3bn.

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