DaimlerChrysler Hooks Up With China's Chery To Sell Small Cars in U.S.

STUTTGART, Germany — In a major step toward adding fuel-efficient cars to halt declining sales in the U.S., DaimlerChrysler on Tuesday said the Chrysler Group is about to sign off on a deal to supply Chery-built vehicles in North America and Western Europe. The vehicles will be distributed under the Chrysler brands according to the limited partnership agreement.
The vehicles that Chery makes are expected to be new models. Specific products and production volumes were not announced. However, Chrysler signed a letter of intent in late December to buy China-made subcompact cars from Chery to sell in the U.S. under the Dodge brand, starting in 2009. DaimlerChrysler said it had approved the "framework" of a limited partnership on Tuesday to develop small vehicles between the Chrysler Group and Chery.

In a statement, Chrysler Group said the partnership will "allow the company to become a bigger player on the global automotive stage by giving it access to products in new segments more quickly, with less capital spending." The move will allow Chrysler Group to take advantage of China's low-cost manufacturing.

DaimlerChrysler said the deal is contingent upon the approval of the Chinese government. The two companies are expected to sign off on the deal in late March.

Until November, Chery had been working with entrepreneur Malcolm Bricklin to build vehicles for Visionary Vehicles LLC.

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