Chrysler, Chery abandon talks to build small car

Tuesday, December 9, 2008

Alisa Priddle / The Detroit News

The on-again, off-again talks between Chrysler LLC and Chery Automobile Co. to have the Chinese automaker build a small Dodge car for export have broken off for good.

"Chrysler LLC has confirmed that Chery Automobile Co. and Chrysler have mutually agreed that it is in each company's best interest to conclude their discussions on a strategic cooperation agreement that have been active since July 2007," said Mike Manley, executive vice president of Chrysler's international sales and marketing.

"The two companies will shift resources to independently pursue their business objectives," Manley said in a statement, noting both gained "better insights into the opportunities and challenges of pursuing growth" globally.

There have been numerous reports that work was on hold as both companies faced money problems and deteriorating domestic markets. At this year's Beijing auto show, Chrysler officials said the small car being built would not meet U.S. standards.

"The economic situation and market environments around the world have changed significantly since the agreement was signed," Manley said. While Chrysler is fighting for emergency loans to stay afloat as an automaker beyond the end of the year, the once-hot Chinese market also has seen auto sales slow significantly.

Manley said the two companies have gone through "major internal changes and evolution, resulting in different business directions and priorities versus a year ago" and the original premises the two had no longer apply.