Chrysler Signs MOU With Great Wall Auto in Drive Into China

Chrysler LLC signs a memorandum of understanding with China’s Great Wall Automobile Holding Co. Ltd. to explore long-term business ties in the areas of distribution, components and technology, the Financial Times reports today.

Chrysler says in a statement the move is part of the auto maker’s drive for greater involvement in the Chinese auto industry.

A Chrysler spokeswoman in China tells the FT the auto maker plans to “assess the feasibility of a number of options,” but no decisions have been made. “We are talking to a number of Chinese auto makers as part of our ongoing efforts to explore growth opportunities in this market,” she is quoted as saying.

She also says Chrysler and Great Wall are looking to one another’s global distribution networks to sell vehicles.

Chrysler reportedly sold 13,000 imported and locally made vehicles in China last year and this year delivered 11,000 units through May.

In 2006, Chrysler signed a letter of intent with China’s Chery Automobile Co. Ltd. to build compact cars for export to North and South America and Europe. Chery plans to launch sales of a small car in Mexico later this year likely under the Dodge brand.

Great Wall is China’s largest manufacturer of SUVs and pickups and launched its first passenger car this year. The company reportedly has capacity to produce 400,000 units annually and sold about 116,000 vehicles last year.

The Chinese auto maker announced in late 2007 plans to sell shares to fund the development of new diesel engines, expand its technical centers and establish a testing center.

Great Wall also is accelerating plans to become the first Chinese car brand available in Australia and New Zealand. Through importer Ateco Automotive Pty. Ltd., the auto maker will begin sales in October with a network of 50 retailers in Australia and up to six in New Zealand.