Chery inks deal with Chrysler to make cars for N. America

CHRYSLER Group signed a deal today with China's biggest automaker, Chery, to manufacture small cars to export to the United States and other markets.
   
The deal marks the first attempt by a major US automaker to use China as a manufacturing base to serve world markets, The Associated Press reported.
   
The companies expect to export their first vehicle within a year to Latin American or Eastern Europe, and models should reach the United States and Western Europe with 2 1/2 years, said Tom LaSorda, Chrysler's chairman.
   
"As of today, we're committed to building vehicles here for export," LaSorda said at a signing ceremony conducted at a Chinese government guesthouse. "We will combine Chrysler's research and technology and global reach with Chery's lean manufacturing."
   
The deal is part of Chrysler's effort to cut costs and become more flexible through manufacturing arrangements with local partners around the world.
   
Chery, founded in 1997, is China's biggest and fastest-growing automaker, with output last year of 350,000 vehicles.
   
The Chrysler deal gives Chery an opportunity to improve its skills at it tries to expand exports of its own models, said the company's chairman and CEO, Yin Tongyao.
   
"Chery is still young, so we should learn from Chrysler and improve our own competitive edge in the near future," Yin said.
   
The first vehicle exported will be a based on Chery's A1 compact sedan and sold under the Dodge brand, LaSorda said.
   
He and Y in said the companies would jointly develop future models, probably with Chrysler styling on a Chery platform.
   
China is the world's second-largest and fastest-growing vehicle market and has been a bright spot for US automakers amid lackluster sales in their home market.
   
Most major automakers have set up factories in China but until now most production has been aimed at satisfying booming Chinese demand.
In the first five months of this year, the Chinese automaker had 4.8 percent share of its home vehicle market, the world's second-largest behind the U.S.