Chrysler Stands By Chery Partnership

Chrysler Llc Is Committed To Its small-car partnership with Chery Automobile Co. Ltd., but the Chinese auto maker won't get any free passes just because the deal portends cost-savings.

Chrysler Chairman and CEO Robert Nardelli reiterates the Detroit auto maker's allegiance to Chery, which has come into question with the announcement of a new manufacturing agreement between Chrysler and Nissan Motor Co. Ltd.

The new deal calls for Chrysler to build pickups for Nissan by 2011, while Nissan supplies a small car to Chrysler by 2010. Both vehicles are destined for North America, while the car also is aimed at Europe and “other global markets,” Chrysler says.

The arrangement follows January's agreement that Nissan will supply a Versa-based B-segment car to Chrysler for sale in South America next year.

Against this backdrop, low-cost Chery, which is expected to supply Chrysler with 12 vehicles spanning three segments over the life of their agreement, discovers its vehicles are well short of North American consumer expectations. In response, Chrysler is moving to double its China contingent of engineers and procurement personnel over the next 18 months.

But Chrysler stands by its Chinese partner.

“We're not going to limit ourselves to one platform, one vehicle,” Nardelli tells journalists at the SAE 2008 World Congress. “We think the consumer's going to want a broader range of selection. And so we're going to keep looking at if it makes economic sense.”

Similarly, Chrysler product guru Frank Klegon says the auto maker is not confining the boundaries of “Project D” to a single segment. The resulting platform must have the flexibility to support a wide range of vehicles, he tells Ward's.

“The goal is to service the global marketplace,” he says. “You've got to think everything form a 3-door hatchback to a tall crossover vehicle. Because that segment size is all over the world in different incarnations.”

In the wake of Mike Donoughe's sudden departure from Chrysler, Project D now is led by Mark Chernoby, who had been vice president-core components, processes and international engineering.

Despite the turnover, Chrysler “didn't skip a beat,” Klegon says.

Chrysler-Chery Deal Calls for 12 Vehicles in 3 Segments
wardsautoworld.com/ar/auto_chryslerchery_deal_calls/index.html