Thursday, May 24, 2007

Sources: Talks resume on Chery building car for Chrysler

Alysha Webb
Automotive News
May 23, 2007 - 9:12 am
UPDATED: 5/23/07 11:58 A.M.

SHANGHAI -- The Chrysler group and Chery Automobile Co. have resumed talking about Chery assembling a car for the American automaker, industry sources and Chery managers say.

The talks stopped while Chrysler's future was being decided, they said. That future was resolved this month when DaimlerChrysler AG said it would sell a majority share of the Chrysler group to investor Cerberus Capital Management LP.

"We are still talking about producing a car together," said Wang Wei, a spokesman for Chery. "I can't give you any details, though."

Sources said Chrysler and Chery are discussing two models for export. The cars would be sold under a Chrysler group brand, Chrysler has said.

One model is a small car already in production for China. Chrysler plans to ship the car as a kit to Mexico and Central and South America to be assembled for sale in those markets, the sources said. Exports could begin as early as the end the year.

The car "was deemed too small for the U.S. market," said a source familiar with Chery's plans. If Chrysler decided to sell the car in the United States, a new engine would be needed to meet stiffer U.S. emissions requirements, the source said.

The second model under discussion is a production version of the Hornet concept car developed by Chrysler.

The two sides have agreed to produce the Hornet in China, said suppliers and Chery managers. It will be engineered and manufactured at Chery's research center and plant in Wuhu, in the central China province of Anhui.

Details are under discussion. Production could begin as early as 2010, said a supplier.

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