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.

Sources: Talks resume on Chery building car for Chrysler

Chrysler will export a version of this Chery to Mexico and South and Central America as a kit, sources say. It will have a Chrysler group badge. Photo credit: ALYSHA WEBB

Alysha Webb
Automotive News
May 28, 2007 - 1:00 amSHANGHAI -- The Chrysler group and Chery Automobile Co. have resumed talking about Chery assembling a car for the U.S. automaker, industry sources and Chery managers say.

The talks stopped while Chrysler's future was being decided, they said. That future was tentatively resolved this month when DaimlerChrysler said it would sell a majority share of the Chrysler group to 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 by year end.

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. A supplier said production could begin by 2010.

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.

Chery Halts Project With DaimlerChrysler

Associated Press 05.21.07, 5:40 AM ETChery, the Chinese automaker that DaimlerChrysler AG formed a limited partnership with to build Chrysler-branded cars, wants to re-examine the deal in light of the sale to Cerberus, a newspaper reported Monday.

Zhang Li, the general manager of Chery Automobile Co. Ltd., told the German financial daily Handelsblatt the company has halted the project and wants to renegotiate its agreement on building a new compact for Chrysler.

The decision, the paper reported, came after DaimlerChrysler (nyse: DCX - news - people ) agreed last week to sell its money-losing Chrysler Group to private equity firm Cerberus Capital Management LP in a euro5.5 billion (US$7.41 billion) deal.

Zhang said the deal came as a "total surprise" for his company and it had not yet talked with Cerberus about the move.

"We continue to be in talks with Chrysler, but we don't have any contact with the new owners yet," Handelsblatt quoted Zhang as saying.

Calls made to DaimlerChrysler in Stuttgart were not immediately returned.

The euro5.5 billion (US$7.41 billion) deal unraveled a 1998 US$36 billion takeover, which attempted to create a global automotive powerhouse. The future Daimler AG will retain a 19.9 stake in Chrysler.

Analysts say the German company will do much better when it sheds most of it's American arm, which is expected in the third quarter.

DaimlerChrysler shares were down 0.5 percent at euro64.08 (US$86.36)