Chrysler's got bigger problems right now than whether or not it builds hybrid cars.

After quickly spiffing up of its line of aging, unappealing cars and crossovers for 2011, the company's engineers are deep into designing modern, fuel efficient compact and midsize Chrysler, Dodge, and Jeep vehicles to be launched in 2012 and beyond.

But to meet stringent fuel economy requirements up to 34 mpg that come into effect for 2016, the company's larger cars and trucks will have to get more fuel efficient yet. Now, trade journal Automotive News reports that Chrysler is developing a hybrid version of its full-size 300 sedan.

While EPA ratings aren't out yet for the revised 2011 Chrysler 300 with a new 3.6-liter V-6 Pentastar engine, last year's model with a smaller 2.7-liter V-6 was rated at 18 mpg city, 26 mpg highway. Those numbers will have to rise to keep Chrysler competitive, hence the need for a hybrid.

The new hybrid 300 will arrive in 2013, said Chrysler CEO Sergio Marchionne at last week's Detroit Auto Show. He also noted that it will have an eight-speed automatic transmission.

2011 Chrysler 300

2011 Chrysler 300

Whether the 300 Hybrid is a "full hybrid" that can run electrically for short distances remains to be seen. If it is, Marchionne's mention of an eight-speed automatic means it's likely to be a single-motor design of the type favored by Hyundai, Volkswagen Group's VW, Audi, and Porsche, and other brands to come.

Those designs insert a single motor-generator between the engine and the transmission, which costs less and uses more components from the non-hybrid versions of each model.

The drawback is that a single motor cannot both power the vehicle and recharge the battery pack simultaneously, as the more complex twin-motor designs from Toyota and Ford can.

2011 Chrysler 300. Photo by Joe Nuxoll.

2011 Chrysler 300. Photo by Joe Nuxoll.

Chrysler briefly built hybrid versions of its Dodge Durango and Chrysler Aspen large sport-utility vehicles in 2008, but the entire model line was canceled amidst the spiraling financial troubles that ended in the company's bankruptcy early in 2009.

Last March, it also canceled a planned Dodge Ram Hybrid pickup truck, which was to have used the same Two-Mode Hybrid transmission from General Motors as the hybrid sport utilities.

Future versions of the Two-Mode Hybrid system will be developed and used by GM alone, so Chrysler must now start from scratch in developing its own hybrid hardware.

[Automotive News (subscription required)]