Chrysler and Chery officially pull the plug on small car venture

Any thoughts that Chrysler had of getting small cars through a joint venture with China's Chery Motors are now officially dead. The Detroit News has been told by Mike Manley, Chrysler EVP for international sales, that discussions between the two companies have concluded and the companies will pursue their own directions. The slackening Chinese market has meant that Chery has been losing significant amounts of money there and can't afford to invest in expansion to engineer and produce products for Chrysler elsewhere. Chrysler's hope had been to use the low cost of production in China to source small cars, but Chery is so far from producing products that would be able to pass US safety and emissions regulations that the cost would still have been prohibitive for Chrysler. For now it looks like Chrysler will be relying on Nissan and its Versa platform, at least in Central and South America. It's still not known if they will offer a variant of the Versa in the US.

[Source: Detroit News]