Chrysler Corp. unveiled the product of its quarter of a billion dollar investment this week, its new small car that represents a major effect to halt the critical decline in its sales and corresponding market share.

The model, sold by the Plymouth division as the Horizon and by Dodge as the Omni, was presented this week as the first small, front engine, front drive domestic car to be built in decades. The only other U.S.-produced front drive autos ar the soon-to-be-discontinued Cadillac Eldorado and Oldsmobile Toronado.

Chrysler touts the new model as a "small" car, not a compact or subcompact.

It's a defendable proposition since the car weighs just over 2.100 pounds, has a wheelbase of 99.2 inches and interior space of 100.2 cubic feet.

List price for the car is $3.706 and that includes an AM radio, white wall tires, a side bump strip and other small items that are now added cost options on other Chrysler products.

The weight and wheelbase of the Horizon and Omni would put the cars in the subcompact class of the Ford Pinto, Chevrolet Chevettee and Volkswagen Rabbit; the interior space puts it in the compact category of the Chevrolet Nova and Ford Maverick.

With a manual transmission, the car tested at 25 miles per gallon for city driving, 39 mpg highway and 30 mpg composite, according to the Environmental Protection Agency.

The Horizon and Omni have a distinctly international flavor. Pumps and compressors are made in Japan; its basic engine is imported from Germany. The same engine and transaxle - transmission and differential gearing - will be used by Volkswagen in the American-made Rabbit in four months.

Both Chrysler and Volkswagen will be adding intake and exhaust manifolds, ignition wiring and alternator to the imported engine.

Despite Chrysler's French subsidiary Sinea having produced about 3 million front engine, front drive cars since World War II, only about half a dozen parts in the Horizon and Omni will be from France.

For Chrysler the car represents a critically important move. The company's market share has fallen sharply in recent months with references to "The Big Three" auto makers increasingly changed to "The Big Two."

Now the company has invested nearly $250 million in the Horizon and Omni. The Belvidere, Ill, assembly plant, roughly 90 miles north and west of Chicago, was closed for four months, gutted and completely rebuilt inside to handle the model. Chrysler plans to produce about 200,000 of the cars by next September.

The new cars are crucial to Chrysler's survival. Without them, the company's corporate fuel economy average for 1978 model cars would be 17.8 mpg. That is about of the 18 mpg required by existing law and would make the company liable to millions of dollars in fines. With the Horizon and Omni Chrysler expects its average fuel economy to be 18. mpg.