Chery, Chrysler Ink Deal

Washington DC July 3, 2007; The AIADA newsletter reported that the Chrysler Group's groundbreaking deal with China's Chery Automobile Co. to build subcompact cars for the U.S. and other markets is expected to get the final green light today, according to the Detroit News.

Chrysler signed a letter of intent with Chery in December, under which the Chinese automaker would build small cars to be sold by Chrysler in the U.S., Western Europe, and other markets around the world. That deal has been pending approval from the Chinese government.

Chrysler's deal with Chery could mark the first time Chinese-made cars will be sold in the U.S. by an American car company. The Chery deal was considered a breakthrough for Chrysler, which was searching for a low-cost partner to build and supply subcompacts.

Chrysler's Tom LaSorda is excited about gaining subcompact presence in the U.S. "Every other automaker is importing B-segment cars into the U.S. market - except Chrysler Group," LaSorda said. "We've got to get into play here." With sales of about 80,000 vehicles last year, Chery is China's eighth-largest automaker.