Chrysler has signed a deal with Chinese producer Chery to manufacture small cars as Chryslers to be sold in the United States and Europe as well as other regions, including Latin America. It is the first attempt by a major US carmaker to use China as a manufacturing base to serve world markets.
Chrysler’s boss Tom LaSorda explained how it will benefit his company: “Chery’s participation in this agreement and their focus on small and sub-compact cars will have a nearly immediate effect on the Chrysler Group’s offering in the small-vehicle segment.
Chrysler – which is struggling financially and being sold off from DaimlerChrysler – is trying to cut costs and become more flexible through manufacturing arrangements with local partners around the world. Almost five million cars were sold in China last year. Just over a quarter of them were Japanese, with Chinese firms very close behind. European car makers have 22% of the market, followed by those from the US with 14%.
Chery, founded just ten years ago, is one of China’s biggest and fastest-growing carmakers and last year turned out 350,000 vehicles. With this deal, Chrysler said its sales outside North America should double over the next five years.