Chery-Chrysler Deal to come to fruition next month

Chery Automotive Co. has almost completed the deal with Chrysler to build a new small car for sale in the United States in the next two years, and the two parts will officially sign an agreement next month to mark the initiation of the cooperation. Specifics of projects covering the development and production of vehicles will be unveiled by then.

Negotiations between the two have been delayed for a while following Chrysler's separation from DaimlerChrysler, which is now expected to be completed this fall. This partnership if it is indeed realized will not only give Chery access to the American market, but will also help Chrysler round up its model line-up in the U.S. as well as cut down production cost.

Chrysler Group CEO Tom LaSorda has been discussing specific projects with Chery executives starting last year. The objective is to have Chery build a small "B-class" subcompact vehicle that could be sold under the Chrysler and Dodge brands in North America and Europe. Representatives of Chery have also been to the Auburn Hills early this month to talk over various aspects of the cooperation. LaSorda suggested Chrysler could even expand its ties with Chery if the current joint venture proves productive.

DaimlerChrysler's board of supervisors has already approved the link-up with Chery at the beginning of this year over the vocal objections from both German and American union representatives on the board.
 
Moreover, it is worth noting that the Chery's venture with Quantum, a $743 million venture between Quantum, an American branch of Israel, and Chery, is already in full operation. The venture will target the development of "high-end" sedans.