Chrysler's goal in launching a joint venture with China's Chery was to produce low-cost small cars for the American market. No problem, right? Wrong. From the very beginning, the two automakers had a bit of a rocky relationship, with Chery offering a line of vehicles that weren't quite up the the safety or quality standards of American consumers and a dwindling supply of cash from Chrysler. Chery's not going to invest in new cars for nothing.
Recent negotiations between Chrysler and US lawmakers revealed another problem with Chrysler's Chinese ambitions, as Congress had a little problem with investing money into an American automaker that doesn't plan on building cars on US soil. It's no secret that it costs more to assemble vehicles in the United States than it does in low-wage countries like China, but that is a reality that all current automakers must live with.
Unfortunately, the death of this deal may have dire implications for future small cars from Chrysler, though its other deal with Nissan may help pick up some slack. Will we ever see a Dodge Hornet? That, my friends, is increasingly unlikely.
[Source: Automotive News - sub. req'd]