Chrysler Group Officially Gives Go-Ahead for Chery Partnership

Amidst its financial woes, the word is in: DaimlerChrysler’s supervisory board has come back with a positive verdict on the proposed plan that its North American operations, Chrysler Group will pair up with Chinese automaker Chery to build an upcoming subcompact for the Dodge brand. With the American half of the partnership ready and eager to work since the initial announcement at the beginning of the year, it’s now up to the Chinese government to put their seal of approval on the agreement, which shouldn’t take too long. The match-up between a well-known American automaker with an established retail network ideal for distributing Chinese-built cars is an opportunity to ripe for any Chinese automaker, or its government to refuse.

Chrysler Group’s decision to opt for a far-East partner, rather than developing a whole vehicle in-house or with a western partner, such as Volkswagen, which reportedly was considered, makes financial sense for the cash-strapped brand. Aside from sharing the development costs with another firm, a quick glance around the North American subcompact arena shows that all participants, even those wearing golden bowties, have been designed and are built in either Korea or Japan. And although European brands produce subcompact and economy cars in countries such as France, Holland and Spain, future generations are moving toEastern Europe in order to reduce costs. In a statement released, Chrysler Group regarded the B-segment vehicles as critical, as they currently do not offer anything in this category whatsoever.

It will still be some time before we see or hear anything official about the car that will be produced, mind you, or the drivetrain to power it. Due to Chrysler not having any small-displacement engines in the 100-110 horsepower range (traditionally 1.5- to 1.6 liters in capacity), it would need to either develop its own small engine, or, more likely, use one from Chery’s arsenal which would then require extensive work to meet global emissions standards. The vehicle itself would also need to meet all federal US safety regulations, which are far more stringent than China’s lax auto safety laws.

Other attributes vital to the success of this Chinese-built car will be quality, reliability, plus fit and finish. It’s going to take a pretty good car to sway people out of Japanese and Korean-built machines.

One thing that we know is that the car produced with Chery won’t be the Hornet. Chrysler Group’s CEO Tom LaSorda said in a media release that the Chery and the Hornet are two independent projects. Although LaSorda speaks positively of the Hornet in its iconic Dodge design, it all comes down to developing a business case, although Chrysler Group will continue to investigate.

Unless Chrysler Group is bluffing, or, for whatever reason the automaker is unhappy with the vehicle that Chery procures, the case for more than one small, efficient car is next to nil. It’s unfortunate too, as the Hornet is spacious, and above all, would give youthful buyers a trendy design customizable to their tastes.