Chrysler: No Chery Amour

♠ Posted by Emmanuel in , at 12/09/2008 12:28:00 PM
Traveling through Asia recently, something that struck me after being away for a long time was the profusion of Chery car dealers across the region. As with the cases of Japan and South Korea before it, China probably sees the manufacture of Chinese-brand products--not OEM ones--as the culmination of its economic resurgence. To date, however, it is fair to say that the Chinese have made limited inroads in this regard. Your average global consumer probably isn't familiar with Chery (cars), Haier (white goods), and Huawei (routers) yet.

I bring this up because it turns out that Chrysler recently approached Chery to make small cars for it under, you guessed it, OEM-style terms. Being snarky old me, it probably dawned on the Chery folks that, well, there may not be a Chrysler for much longer. Of course, what strikes me here is the waste of opportunity. What should have instead transpired was Chrysler selling its remaining interests to the Chinese. Given Chery's ambitious efforts to sell cars in international markets, buying Chrysler could have given it recognizable brands as well as an established dealer network stretching across North America. For more of my thinking on this, see the "Sell Ford and GM to the Chinese" series [1, 2, 3]. Mayhaps I should have included Chrysler too but the title would have become unwieldy. Nevertheless, the logic is the same. As inept as American car advertising is sometimes, you can't beat this mangled English for the Chery Cowin:

The dynamic body design that complies with aesthetics design concept endows the whole body a very natural look. The streamlined body reduces the wind resistivity efficiently. The new front grille is of more fashionable beauty.

The brand new one-piece cadmium plated front grille bestows the exterior with more fashionable aesthetic feeling of the modern times: everything reflects the metropolis style.

The crystal one-piece headlight gives a clear field of vision, which along with the dynamic body, makes your tour in the city ostentatious.

See? I don't make this stuff up. Anyway, from the WSJ:
Chrysler LLC has ended cooperation talks with China's Chery Automotive Co. in reaction to the global economic slowdown, Chrysler said in a statement on Monday. Chrysler had been planning to have Chery produce small cars that it could sell in China and in the U.S.

"Both companies have since gone thought major internal changes and evolution, resulting in different business directions and priorities versus a year ago," Chrysler's statement said. The statement was issued in response to inquiries by the Wall Street Journal.

"Many of the original premises the two companies had when entering into the agreement no longer apply," Chrysler said. According to a company spokesperson, coming to the end of the road with Chery will have no effect on any of the more than two dozen other alliances and partnerships Chrysler is currently engaged in. "Our partnerships are not interdependent," said spokesman David Elshoff in an email.

Neither Chrysler nor Chery are disclosing any detail about their discussions, Chrysler said. The talks began in July 2007 and lasted more than a year. Their end means what had appeared to be a promising effort to expand its overseas operations and build up its small car lineup...

Chrysler, which controlled by private-equity group Cerberus Capital Management LP, faced tough questions before Congress last week about whether it is viable in the long term or is simply looking for enough money and time to court a suitor. The auto company's November U.S. new-vehicle sales fell 47% compared to a year ago. The U.S. is by far its largest market.

Chrysler's efforts to penetrate foreign markets have sputtered in the past. It is using up cash at a rapid rate and has told Congress it needs $7 billion in loans before the end of the year or it may not be able to stay in business.