Chery and Chrysler Group Finalize Small Cars Cooperative Agreement
04 July 2007
The Chrysler Group and China’s Chery Automobile have finalized their cooperative agreement which will result in the first imports of Chinese-manufactured cars into the US under the aegis of a major automaker.
Under the agreement, Chrysler and Chery will work together to develop, manufacture and distribute Chery-made small and sub-compact cars in North America, Europe and other major automotive markets under the Chrysler Group brands.
Chrysler will identify several small-car models now being developed by Chery in China and work collaboratively to make any necessary branding and regulatory modifications prior to their entry into other markets. Both companies also will jointly develop new globally competitive products based on future Chery small-car platforms.
This is a win-win for both of our companies, and I am confident this will be a successful relationship. Chrysler brands are very well known in the US and Europe. We’re prepared to work with Chrysler Group to expand their small-vehicle lineup with competitive products and accelerate both our companies’ international competitiveness.
—Yin Tongyue, Chery Automobile Co. Chairman and President
This is the start of a very long relationship between Chrysler and Chery. Chery’s participation in this agreement and their focus on small and sub-compact cars will have a nearly immediate effect on Chrysler Group's offerings in the small-vehicle segments. This strategic partnership is part of a new business model that is allowing us to introduce all-new products more quickly, with less capital spending.
—Tom LaSorda, Chrysler Group President and CEO
Chrysler made its first foray into China 25 years ago with the formation of Beijing Jeep Corp., the first international automotive joint venture in the country.
Another record month for Hybrids.
Civic 3246
Accord 342
Honda Total 3588
Escape 2192
Mariner 334
Ford Total 2526
Camry 5530
Prius 17756
Highlander 2403
Rx400h 1562
Gs400h 131
Toyota Total 27,382
Grand Total 33,496
Compare it with June-2006 sales of 23048 and it’s a 45 % increase.
Its 2.5 % of the overall vehicle market.
This does not include sales of GM & Nissan.
Posted by: Max Reid | 04 July 2007 at 07:05 AM
If the Chinese made vehicles flood the US market, the only way for American & Japanese companies is to make hybrid vehicles giving good mileage, otherwise customers will simply goto Chinese vehicles for a 2-3K return on investment with their overall lower cost.
Posted by: Max Reid | 04 July 2007 at 07:08 AM
Has Chrysler forgotten about their 71 mpg diesel concept car from 2005? It was on greencar congress and they could have had it in production by now. They won't save themselves by being a distributor of low margin cars that they neither design nor produce. Besides when do we stop subcontracting our manufacturing to China?
Posted by: kermit | 04 July 2007 at 07:17 AM
Max Reid:
And... GM sales still going down another -24% in June while Toyota were up +7%. There is certainly a message there.
What will stop Chinese and Indian manufacturers from building much lower cost efficient Hybrids, PHEVs and very low cost ($3000) BEVs.
China already makes most of the world batteries and could do likewise with electric car motors + control systems etc. India is getting ready to mass produce a $3000 BEV.
GM + Ford + Chrysler will have to move their production where labour cost is lower to compete. This Chrysler-Chery arrangement will be follwed by many more. USA/Canada UAW members will not like what is coming. Their next contract may include a substantial reduction in pay and benefits.
The local meat industry workers had to accept a 25% reduction in pay a few months ago.
Posted by: Harvey D | 04 July 2007 at 07:33 AM
GM, Ford and Toyota will be directly affected by this partnership and it should show up initially as reduced small car sales by the other three companies. Hopefully this partnership will leap frog GM, Ford and Toyota into the BEV and PHEV markets because GM, Ford and Toyota have been reluctant to advance into PHEV and BEVs. Now that Chrysler is a private company, they could return to being the engineering company they were once. They are showing this ability already by bringing the efficient, low-cost paddle-shift transmission to mass use. They are a company on the move and that's great.
Posted by: Lad | 04 July 2007 at 08:11 AM
In early 1990's when Walmart suffered some loss, their decision was to go to China, it worked, but thousands of factories and jobs were moved to China.
Now the auto industry is at that point. Higher gas prices were forcing them to give bigger discounts which takes a toll on their profits.
Chrysler is going to bring China made Cherokees, Durangos and Aspens and dump them in US market for low prices. These gas-guzzlers will further increase US demand for gas and increase gas prices.
Best way is to go the Hybrid way.
Again, the Chinese are the largest makers of Electric Bicycles, and with little battery improvement, they could make a proper 4-seater EV for around 10K. If thats a plugin, it will be a big hit.
Posted by: Max Reid | 04 July 2007 at 11:37 AM
Max Reid:
A smart way to deal with locally or Chinese made gas guzzlers is to apply a progressive carbon tax on both the vehicle + gas and use those extra revenues to support the purchase of efficient (less than 5L/100Km) vehicles.
Of course, one must apply progressive penalties and incentives fairly, regarless where the vehicles are built.
UAW + the Big Three would have to become more productive to survive in USA and Canada. Otherwise, they will go as did the radio/TV manufacturers did.
Posted by: | 04 July 2007 at 02:11 PM
Typically Asian vehicles are lighter and have higher mileage. If such vehicles come to US and have 45 MPG with around 12 K price tag and have 4 seats, it should sell like hot cakes if the gas prices stay around $3 / gallon.
Posted by: Max Reid | 04 July 2007 at 03:43 PM
Please with the tax increases already, wow do turbo-libs not realise most people are paying way to much taxes already. Tech improvements not recession causing tax increases.
Posted by: Richard | 04 July 2007 at 05:02 PM
Why is it that so called conservatives, like dubya create massive deficiits and liberals like Clinton created budget surpluses.
What if we got out of IRAQ today and spent that money on Electric transportation and cleaning up the electrical grid.
What if we subsidised wind and solar instead of subsidizing OIL.
If you want to cut taxes eliminate the income tax and replace it with a carbon tax. We should penalize the polluters instead of penalizing sucess in the job market.
Am I a Liberal or a Conservative?
answer NEITHER one :)
Posted by: KJD | 04 July 2007 at 08:30 PM
Oh I almost forgot....
If Chrysler builds a BEV I will be one of the first ones to buy it.
Posted by: KJD | 04 July 2007 at 08:33 PM
Chrysler will be the Walmart of the car industry. Only one thing is certain in the auto industry's future, US wages will decrease.
Posted by: John Schreiber | 07 July 2007 at 03:32 AM
Our key to becoming competitive in car manufacturing will be universal health care, here and around the world. We are already paying too much, we will save when we streamline our own system, and businesses and employees will be better able to compete. The #1 burden our car co's have is the health care and legacy costs. I hate to take on the Big 3's debt but we will have to, because every 4 years, the politicians want to people in Michigan to have jobs. But everything else comes from China, why not cars?
Posted by: Tom G | 09 July 2007 at 04:07 PM