Thursday, February 21, 2008

Chrysler to form China JV with Chery

Feb. 22, 2008 (China Knowledge) - Chinese auto marker Chery Automobile is in talks with Chrysler, the No. 3 U.S. car producer to form a joint venture in eastern China's Anhui Province, but the Chinese company said it would be a long-term option, source said on Wednesday.

"A joint venture with Chrysler was and still is an option, but I am not expecting any big moves of any sort in the near term," a Chery spokesman said.

The new auto plant, located in Chery's home base, is expected to design and produce smaller and cheaper compact cars than Chrysler's previous model Dodge Neon, which has stopped production in 2005, sources familiar with the issue said.

In early June last year, the two has inked an agreement to introduce Chery's compact cars to the U.S. market and sell them under the Chrysler badge, but specific date for the introduction has not been decided since then.

The Chrysler spokesman said the company is eager to bring small cars made by Chery to the U.S. and North American market on the premise that the models have to meet the global standards.

Chery, one of the fastest growing home-grown Chinese car makers, is eyeing global market over recent years and plans to generate 40% of its sales overseas by 2010.

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