It's Official Unless China Says It's Not: Chery To Make Itty-Bitty Cars For Chrysler Group

This deal's been in the works for what seems like forever. We'd even heard the 'merican side of the German-American hybrid was all set to go in October of this past year, but held off for "political reasons." So it's really no surprise that the deals' done — the DaimlerChrysler supervisory board's approved the "framework of a limited partnership to develop small vehicles between the Chrysler Group and Chery Motor Company of China." Under the agreement, Chery-built vehicles would be distributed under Chrysler brands, primarily in North American and Western Europe. That means we'll be talking about a Dodge, as it's the only brand the 'merican side of the not-so-much merger of equals is building any brand equity with. And that means it'll be the little horn-dog of a Hornet, and this will be an easy and quick win for Tom "Need To Lose Weight Of Excess Employees Fast" LaSorda. Of course the deal's still contingent on the approval of the Chinese government, but we're assuming that'll happen — unless the Hornet's some symbol of uncleanliness to a minority religion in China. But probably not. Full press release after the jump.

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.

Related:
Chrysler Would Prefer A Chery-Flavored Hornet Rather Than Plain Chery; Chrysler Boss: Company Even Closer to Choosing China's Chery to Build Subcompact [internal]