Filed under: Economy, China, Chrysler, LLC.
Chrysler small car on hold: Chery wants to renegotiate with new owners
While Chrysler Corp. and its new owner Cerberus Capital Management are still enjoying the Honeymoon phase of their courtship, Chinese automaker Chery is reconsidering its deal with the U.S. automaker to build Chrysler-branded small cars. It seems no one from the soon-to-be defunct DaimlerChrysler alerted Chery to the impending deal, which came as a "total surprise". Chery's general manager Zhang Li told a financial daily that his company has halted the Chrysler small car project until such time as both automakers can renegotiate their agreement. One wonders if Chery hopes to renegotiate the deal in their favor now that Chrysler Corp. has new owners at the helm, potentially with more money to spend on a Chinese-built small car. Chery may have the upper hand here, as it knows Chrysler desperately needs a B-class small car to sell around the world and, as far as we know, has no plan B in the works if the deal with Chery falls through.
[Source: just-auto.com, sub. req'd]
Reader Comments (Page 1 of 1)
Don 2:18PM (5/21/2007)
How about Cerberus/Chrysler tells China to go f*ck themselves and goes with another design/manufacturer that won't build them a totally underwhelming, competitive car?
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geo.stewart 2:37PM (5/21/2007)
#1, I didnt even feel it when you plucked those words out of my mouth.
the chinese have never and will never play fair. let em rot on the vine. they want to negotiate? 25% less or we walk. and if quality is less than 98%, then Cerebrus pays .50 on the dollar for the batch.
We need to build more plants in mexico, instead of going to china. if we did, we'd have less immigration ;-)
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Fabulo 3:09PM (5/21/2007)
"One wonders if Chery hopes to renegotiate the deal in their favor now that Chrysler Corp. has new owners at the helm, potentially with more money to spend on a Chinese-built small car."
Not at all. They're hoping to get less money, that's always why one would want to reconsider. "Wait, I think we're making too much, let's talk to see if we can lower our price"
Makes a lot of sense...
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bmoredlj 3:24PM (5/21/2007)
Cerberus would probably get a better deal going with Raspbery or Hucklebery, but not Blackbery...they just make knockoff Blackberries.
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PeakVT 5:12PM (5/21/2007)
Perhaps I missed some crucial memo explaining the difficulties, but it just baffles me that Chrysler can't engineer a B-car. The Neon was pretty dang small, and is basically the same width as a Fit/Versa/xA/Yaris/whatever. Why can't it be shortened a tad, get a new higher roof, and fitted with an engine from Hyundai? Sure, the design needs updating, but it is not like Chrysler has to start from scratch - it has built small FWD cars before.
The whole attitude of "can't" that eminates from Detroit has puzzled me for years.
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KJC 7:13PM (5/21/2007)
I agree with #1.
I don't know if any of Xhrysler's market would even look at a B car.
With all the Magnam, Hemi, Charger, RAM big is better theme.
Xhrysler can build a decent B car on it's own but it would not be profitable.
Profit margins are what it's all about among the domestic three.
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Greg A. 8:06PM (5/21/2007)
#5: You must have missed the news that the B-segment car Chery is supposed to build for Chrysler Corp. is to be based on the Dodge Hornet concept, which was engineered and built by Chrysler.
Anyway, I hope the newly independent Chrysler's response to Chery's "How bad do you want it?" is "Not THAT bad."
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tj 9:32PM (5/21/2007)
the period should go on the inside of the quote.
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gary 10:44PM (5/21/2007)
I wonder if they understand Cerberus was the 3 headed dog that guarded the gates to Hell?
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antonio 11:50PM (5/21/2007)
China on the whole should be totally avoided when doing any kind of business. As they never play fair, and will never do any kind of business unless they're having a clear advantage on the deal. Having a Chinese company making a car for an American brand will be a major blunder. They will simply gain knowlege of the US market, then start to sell directly here with their own dealers, and at the same time they won't open the chinese market to any US manufactuer, unless of corse they have a major benefit from it. If the new team at Chrysler plays its cards right they can not only outwit the Japanese manufacturers, but also avoid this deal with Chery. The key is market timing, and soon they will be lean enough to jump on every trend as it emerges. Avoid the deal with chery, they should use the existing contacts they have with mitsubishi to build this small car, then they should build one of their own!
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Tom 10:13PM (7/17/2007)
I mean if anyone here read Chery's history, you will see that Chery is really determined when it comes to quality, it hired Japanese engineers, it is one of 5 car companies in the world to possess a very advanced painting system, it has one of the world most advanced quality control system.
http://www.answers.com/chery
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