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Chrysler, the fourth-largest U.S. automaker, dropped plans for its new Imperial luxury sedan because of rising gasoline prices and tougher fuel-economy regulations.

Executives made the decision within the past few weeks, Chrysler spokesman Ed Saenz said today. The Auburn Hills, Michigan-based automaker unveiled the Imperial two years ago and had planned to start production in 2009 in Brampton, Ontario.

"There was no business case for us to bring it to the market," Saenz said. "We will continue to look for a future product for the plant." The decision puts a $597 million investment in the factory on hold, while not affecting any of its 3,500 jobs, he said.

Chrysler is investing $3 billion to produce more fuel- efficient engines and other powertrain components. The automaker has been hurt by its reliance on pickup trucks, sport-utility vehicles and minivans that are losing sales as U.S. gasoline prices stay near $3 a gallon. The U.S. Congress is also considering an increase in fuel-efficiency standards.

"It makes sense not to build a high-end, lower-volume car when the direction of the market is moving toward smaller vehicles," said Tom Libby, an analyst at marketing-research firm J.D. Power & Associates in Westlake Village, California. "If there is a hole left in Chrysler's product lineup without the Imperial, it's a not a hole in the growing part of the market."