Chrysler Plan to Bring Small Chinese Cars to North America Is Reportedly Dead

Chrysler Plan to Bring Small Chinese Cars to North America Is Reportedly Dead

Chrysler's plan to bring small, fuel-efficient cars made by China's Chery Automobile Co. to North America may be dead, according to a report in today's Automotive News (subscription required).

Last year, Tom LaSorda, Chrysler's CEO at the time, touted a deal in which Chery would supply small cars such as the one pictured here to Chrysler.

The two companies were scheduled to start bringing cars to Mexico this year. But now, neither company is talking about the deal. And a source says the program is on hold.

"I wouldn't place much hope on it," a former Chery executive familiar with the Chrysler deal told Automotive News. "Both companies have their own problems to deal with, and both have run out of money."

He said a major obstacle was the substandard quality of Chery's cars. "Chery knows there is no way for these cars to meet the safety and emission standards of the U.S. market in the near future," the former executive said.

Chrysler and Chery never offered a public timetable for the arrival of Chery-made cars in U.S. showrooms. In a May interview with Automotive News, LaSorda said plans for Chery's U.S. debut were having difficulties.

"We need small cars," said LaSorda, who now is Chrysler's co-president. "Chery's cars are still not ready for that exposure into these markets."

China-built cars probably won't be ready to meet U.S. safety and emissions standards for "three years or more," LaSorda added at the time.

Plans to bring Chery-made cars to Mexico for Chrysler also are on hold, the former Chery executive said. Last Thursday (Nov. 13), Chery spokesman Jin Yibo said, "We have no further information to release at this stage."

Asked to comment on the prospect of Chrysler getting cars from Chery, Chrysler spokesman David Elshoff said: "We're not aware of any change to the status to our relationship with Chery."

A joint venture between the two automakers would give Chery its first experience of the U.S. market, while Chrysler would benefit from adding a small vehicle to its line-up that would 
capitalize on the growing demand for fuel-efficient models in the country, the forecasting and research firm IHS Global Insight said in a statement released today.

Given the troubles that Chrysler is facing in its domestic market--its share is plummeting and its future under Cerberus Capital Management is uncertain--it remains to be seen whether the company is still in a position to take on any vehicles that may come out of the joint venture in the coming years, IHS Global Insight said.

Scott Doggett:  is an AutoObserver.com Associate Editor.