Chrysler's plans to get into the small-car market with the help of Chinese automaker Chery Automotive Co. are finished.
Chrysler announced Monday the two companies had mutually agreed to stop their discussions on a strategic cooperation under way since July 2007 -- a month before Cerberus Capital Management took control of Chrysler.
The automakers had previously agreed to work together to develop, manufacture and distribute Chery-made small cars in North America, Europe and other major automotive markets under a Chrysler brand.
At the time, Chrysler executives praised the partnership as a way for the Auburn Hills automaker to quickly and less expensively augment its vehicle lineup.
"The economic situation and market environments around the world have changed significantly since the agreement was signed," Mike Manley, Chrysler executive vice president of international sales and marketing, said in a statement. "Moreover, both companies have since gone through major internal changes and evolution, resulting in different business directions and priorities versus a year ago. As a result, many of the original premises the two companies had when entering into the agreement no longer apply."
Earlier this year, Chrysler signed a deal with Nissan Motor Co. for the Japanese automaker to build small cars for Chrysler.