The DaimlerChrysler Supervisory Board today finally signed off on the limited partnership between the Chrysler Group and Chery to develop small vehicles. Under the agreement, Chery would build vehicles to be distributed under the Chrysler brands, primarily in North America and Western Europe. While DaimlerChrysler’s press release says “the Chrysler brands,” we assume it is talking about Dodge, as it is the only Chrysler brand that makes sense for a small car.

Back in December, Chrysler announced a preliminary agreement with Chery to build a new small car in China for worldwide export. At that time, Chrysler Group CEO Tom LaSorda said the automaker was not considering a production version of the Dodge Hornet concept, but rather it would a Dodge-branded Chery model. Word on the street is that Chrysler is now considering a production version of the Hornet, because of quality concerns of Chery vehicles.

While DaimlerChrysler has signed off on the deal, it’s still contingent upon approval of the Chinese government.

Full press release after the jump.

## Source: DaimlerChrysler ##

PRESS RELEASE:

DaimlerChrysler Supervisory Board Approves Small-Car Agreement

Auburn Hills, Mich./Stuttgart, Germany, Feb 27, 2007 - The DaimlerChrysler Supervisory Board today approved the framework of a limited partnership to develop small vehicles between the Chrysler Group and Chery Motor Company of China. The deal is still contingent upon approval by the Chinese government, but the final pact of the framework is expected to be signed by the end of March. Under the non-equity partnership, Chery-built vehicles will be distributed under Chrysler brands, primarily in North America and Western Europe.

Chrysler Group indicated that the partnership would 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.

Small vehicles such as these will allow Chrysler Group brands to compete in segments in which the brands do not currently compete, and which are especially important in price- and fuel-economy sensitive markets. Some 67 percent of all vehicles sold outside of North America are in these segments. Chrysler Group’s major competitors in the U.S. and Western Europe have similar arrangements with Asian manufacturers for vehicles in these segments.

Posted in: Chrysler, Dodge, Manufacturing, Economy, DaimlerChrysler, News, China, Chery
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