Chery Chrysler talks resuming

The Chrysler group and Chery Automobile Co. will resume discussions concerning Chery building a car for the newly "freed" American car builder. These talks had already begun a while back. They were however thwarted when heads of both sides were being renewed. Chery announced recent Zhang Lin will replace Kan Lei to continue talks on building Chrysler-branded cars with Chrysler's new owner.

Chery's new head of international business, Zhang Li has told the media before that Chery had stopped a joint project with DaimlerChrysler AG after the German carmaker sold its US unit Chrysler. "We are still in talks with Chrysler, but have not had contact to the new owners," Li said.

Analysts predict Cerberus may be willing to continue the deal but conditions have changed for the two parts. Chery will not give up asking for a production fee, and Chery may suspend the talks if Cerberus aims for shareholdings at Chery although it may accept cooperation in the form of a joint venture.

DaimlerChrysler sold an 80.1 pct in Chrysler to Cerberus in a 5.5 bln euro deal to offload the troubled US unit. Meanwhile, Chrysler's head Tom La Sorda last week said he is targeting a closer cooperation with Chery.