Chrysler to market Cherys

CHRYSLER Group will start selling Chinese-made compact cars under its own nameplate in the United States by the end of this year, a move that is expected to help the money-losing auto maker turn around its fortunes with a stronger presence in the small-car segment.

The deal involves the A1 hatchback made by China's Chery Automobile Co Ltd, Chery President Yin Tongyao said at a signing-ceremony with Chrysler yesterday in Beijing.
   
The 1.3-liter hatchback will be sold in the United States and other markets under Chrysler's Dodge brand, said Tom LaSorda, Chrysler's chief executive officer. The model will first hit Latin American and Eastern European markets before entering North America and Western Europe.
   
Neither party would disclose the price of the cars, which sell for 53,800 yuan (US$7,100) in China. Annual production capacity is expected to eventually reach 100,000 units.
   
"Cooperating with Chery will improve Chrysler's competitive edge in the small and medium-sized segment," said LaSorda, adding that the partnership will allow Chrysler to roll out new products more quickly with less capital expenditure.

Wuhu, Anhui Province-based Chery is the nation's fourth-largest car maker with sales of 305,000 units last year, including 50,000 exports to more than 50 markets.
   
Under the deal, Chrysler will be the first US automaker to import cars from China, a cooperation that is expected to lead to development of new models based on Chery's small-car platform.

Detroit-based Chrysler is restructuring its product portfolio to make more small, fuel-efficient vehicles as demand for its present line of big vehicles declines amid soaring gas prices.
   
"We hope to gain 20 percent market share in the small car segment by 2010 worldwide," according to Michael Manley, executive vice president for international sales, marketing and business development for Chrysler Group.
   
Chery earlier expected to start sell its self-branded vehicles on the US market in 2008 with America's Visionary Vehicles LLC.
   
But the plan was scrapped last November when the two sides couldn't resolve differences over technology development and investment.
   
Chery's Cowin sedan recently received the lowest safety result in a crash test conducted by Russian's Auto Review magazine.
   
The car maker said the result ran counter to a similar test in May and was used by foreign car makers as an excuse to keep China's price-competitive models from entering their market.