Daimler approves small car deal with China's Chery

DETROIT, Feb 27, 2007; Reuters reported that the board of DaimlerChrysler AG said it has approved an alliance between its Chrysler Group unit and China's Chery Motor Co. aimed at the growing market for smaller cars.

Under the deal, which will not include an equity investment, Chery will build vehicles under Chrysler's brand names for sale in the United States and Europe, DaimlerChrysler said in a statement.

Chrysler reached its deal with Chery at the end of December.

The deal is still awaiting approval from China's government. A final pact is expected to be signed by the end of March.

Chrysler is cutting 13,000 jobs in a bid to return to profitability by 2008. Daimler is in the process of considering offers to buy the automaker, which includes the Jeep, Chrysler and Dodge brands.