Chrysler to part from Beijing JV in pursuit of Chery

Shanghai, April 16 (Gasgoo.com) – As the deal between Chrysler and Chery is coming around the corner, the Detroit-based automaker is planning to quit its joint venture with Beijing Auto step by step, state news agency Xinhua reported today.

According to a source familiar with the deal, Daimler AG is set to seek a property settlement at its three-party joint venture Beijing Benz-DaimlerChrysler Automotive Co Ltd (BBDC) over a period of six months, by which time Chrysler may have to part from the venture in a low-key attitude.

Following the sale of Chrysler by Daimler AG to Cerberus Capital Management last August, Daimler AG continues to hold 50% stake in BBDC on behalf of Daimler-Chrysler while Chrysler maintains the relationships only on the technological basis.

On the product front, though sales of the newly launched Sebring have been upbeat, the 300C model has seen a sharp sales decline in the Chinese market.

The source said the 300C production contract with BBDC will expire by 2010 and Secring will last till 2013.

Separately, Chery Automobile Co is reported to forge a tie-up with Chrysler by setting up a joint venture as early as the first half of this year, citing words of Jin Gebo, top aide to Chery's general manager.

Chery may use land and technology as investment in the joint venture while Chrysler will fund the project with cash. And this joint venture will be a 50-50 partnership.