Southeast seeks closer ties with Chrysler

Now another Chinese automaker, Southeast (Fujian) Motor Corp., wants to set up a joint venture with Chrysler.

Ling Yuzhang, chairman of Southeast, says Southeast has already discussed plans with Chrysler on the establishment of a joint venture and is now awaiting replies from the American automaker.

"We think setting up a joint venture is a good idea and we're giving Chrysler time to think it over," says Ling.

Southeast currently has an annual production capacity of 150,000 cars. Ling says, Southeast would be able to quickly expand its capacity if the two sides can decide on forming a joint venture. Says Ling: "We can build a new plant within one year in China."

Southeast currently assembles the Chrysler Grand Voyager and Dodge Caravan for the China market under a licensing agreement with Chrysler.

Meanwhile, it also produces the Mitsubishi-badged Lancer and Galant sedans. Its first self-brand car, the V3 sedan fitted with 1.5-liter engine supplied by Mitsubishi, is expected to hit the China market in the second half of this year.

Southeast sold roughly 60,000 vehicles in 2007, including the Mitsubishi, Chrysler and Southeast models. Ling says sales in 2008 are expected to reach 80,000 units.

Ling says Chrysler would like Southeast to make more cars for the China market under its badges by modifying models developed on its U.S. platforms.

A source with Southeast says the company is also looking to make compact cars and sedans for Chrysler.

Besides assembling more Chrysler's models in China as Southeast is currently doing, Ling says there is another way for the two companies to expand cooperation. "We can make their vehicles in China by leveraging China's competitive costs and export them to the United States," says Ling.

Ling admits that his company has yet to make detailed plans on how to expand cooperation with Chrysler.

Philip Murtaugh, head of Chrysler's Asian operations, showed up at a press conference organized by Southeast at its booth at the recent Beijing auto show. But he declines to specify Chrysler's future cooperation with Southeast.

"We are always looking for Chinese partners and talking to many companies," says Murtaugh.

In addition to Chery and Southeast, Chrysler has contacted other Chinese automakers for possible cooperation since last year.

At a conference organized by Automotive News China in mid-April, Wang Fengying, President Great Wall Motor Co., confirms a group of delegates from Chrysler visited her company in January this year. But she stops short of providing any details on the visit.

A source close to Chongqing Changan Automobile Co. says last year Chrysler talked to Changan about exporting cars based on the company's Benben small car under Chrysler's badge.