Chrysler will engineer the design on a Chery Automobile platform as part of a wider cooperation between the companies to create small hatchbacks and sedans for the Chrysler and Dodge brands to sell in Europe and North America.
"A small sports car is still on our wish list and in the product plan," Chrysler's Tom LaSorda said today at the Detroit auto show. "The Demon is a B-segment size car and it would be on the new B-segment platform from China."
One of the reasons the rear-drive Demon concept would switch to a front-drive platform was emissions regulations, said LaSorda. He said that a direct-injection gasoline engine was in development for the car.
With an eye on future European C02 targets of 130 grams per kilometer, the Demon would help cut the automaker's CO2 emissions and improve fuel economy.
What the Chinese production source means for the quality of the finished product is still a major unknown.
The few cars exported form China so far suffer from poor quality and engineering standards in comparison to their Western and Asian competition.
However, price will be a selling factor, suggesting that the Demon would undercut its main competition, the Mazda MX-5 Miata and Pontiac Solstice/Opel Speedster.
Another unknown is when the small Dodge sports car will go into production. Chrysler is talking 2009 for its Chinese-built hatchback, but still negotiating the details of the contract with Chery.
Quizzed about the apparent slow speed at which the negotiations are progressing, LaSorda joked: "I don't know if you've ever negotiated in China, but if you know a way of speeding things up, I'd like to talk to you."