The American auto industry is a long way from its glory days. These are especially dark times for Ford (NYSE:F) and General Motors (NYSE:GM). Both have increased incentives to the point that they're practically giving their models away to hang onto to shrinking market shares. The recent downgrade in their credit ratings is more than enough to make investors run for cover.

The picture is quite different for the third member of Detroit's Big 3, DaimlerChrysler's (NYSE:DCX) Chrysler group. Granted, Chrysler's May results were hardly a clear indicator of resounding success, because, on an unadjusted basis, sales declined 3%. Still, when corrected for fewer selling days compared with May 2004, Chrysler sales rose 6%. This wasn't as impressive as Toyota's (NYSE:TM) 7.6% adjusted sales increase, but it was still respectable in the midst of a generally softer month for auto sales.

Chrysler's prospects in the U.S. seem pretty bright. Admittedly, sales of the company's highly popular 300 model are leveling off the longer the sedan is on the market. But Chrysler is just now releasing the new Dodge Charger, which is getting rave reviews from critics. In just 10 days of availability in May, Chrysler sold 1,841 units. It seems likely that as marketing ramps up and the car becomes more widely available, momentum will build.

And growth may not be limited to the U.S. A more subtle sign of Chrysler's resurgence comes from a recent story in the German newspaper Die Welt, as reported by MarketWatch. The group is said to be hoping to add 70 dealerships in Germany, Europe's automobile heartland, over the next two years. Chrysler will emphasize the Dodge nameplate, which will be reintroduced on the Continent after a 20-year absence, in the form of the Dodge Caliber, a compact car whose styling mimics the Charger. Chrysler's goal is to double its market share in Europe from 0.7% to 1.4%.

Daimler is far from perfect, as it continues to struggle with its Mercedes unit. But with Chrysler on track for solid growth, Daimler's chances of reviving Mercedes seem good.

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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.