Chrysler is taking heed of tougher fuel-economy standards and shifting demand for smaller and more environmentally friendly vehicles by redesigning its next-generation models to be lighter and greener. The carmaker’s vice chairman, Tom LaSorda, has revealed that the next-generation model, due in 2010, will feature car-like unibody construction as well as a new ‘Phoenix’ V6 engine.

In preparation for the new model, Chrysler plans to spend more than $1.8 billion to refit its Jefferson assembly plant in North Detroit. The same plant will also be responsible for several yet-to-be revealed models based on the same platform, LaSorda explained to Automotive News reporters. The new platform was jointly developed with Mercedes-Benz, but there won’t be much else in common between the future Chrysler and Mercedes products.

To help raise funds for the expansion and retooling of the plant, Chrysler will sell up to $1 billion in non-earning assets. Some of these assets include land around its headquarters in Auburn Hills, Michigan, and its Tritec engine plant in Brazil.

LaSorda also confirmed that a future small car currently being developed with China’s Chery Auto is still on track and could be ready by the end of the year. If completed, the car could go on sale in North America by as early as next year.