Chrysler Cherys Will Take a While

The new alliance between Chery and Chrysler LLC is up and running, but it be a while before the cars spawned by the collaboration will reach showrooms in theU.S. and Europe, a Chery executive says.

Lin Zhang, general manager of Chery's International operations, said the work on the alliance is just getting started and declined to make make any predictions about when a Chery-built Chrysler will reach U.S. showrooms.


"We don't have any kind of timetable yet for entry into the U.S. market," Lin Zhang said. "We won't come until we feel we're ready," he added.

Frank Klegon, Chrysler's executive vice president for vehicle development, said in an interview that vehicles built by Chinese automakers don't yet meet very tough U.S. crash-test standards. The new vehicle Chery is supposed to build for Chrysler will require considerable technical assistance from Chrysler, Klegon added.


"It will be a whole new vehicle," he said. The smallish B-car from Chery will give Chrysler an entry into a growing market around the globe, including the U.S.

Chrysler officials said last summer they hoped to be selling about 100,000-Chery-made vehicles in North America and Europe within "three or four years." However, Lin Zhang said Chery is now building a 240,000-square-meter engineering center at its center of operations in Wuhu, China. The new center will include a state of the art crash-test center but it won't be ready until next year, he said during an appearance at a seminar on the Chinese auto industry sponsored by J.D. Power & Associates. The agenda for both Chery and Chrysler sketched out by Zhang and Klegon suggests it will take 36 months or more before the project comes to fruition.

Meanwhile, Chery, which now has recruited 2000 engineers, is pushing ahead with other projects designed to help it become China 's largest home-grown carmaker. Talent is one of the Chery's strengths.


"It has very strong leadership and a very strong workforce," Zhang said.

Chery is also reaching out to well-established suppliers in the United States and Europe to help boost quality and for critical product expertise, he said.

Michael Dunne, managing director China for J.D. Power and Associates, agreed, noting that Chery's top executive, Yin Tongyao, is considered one of the top automotive executives in China .


"If you believe good leadership makes a difference in the automobile business, and I believe it does, than Chery is in a strong position," he said.

While it’s still relatively small on global scale, Chery ranks 27th among the world’s automakers, and it is clearly the company furthest along in reaching the Chinese government’s goal of building a global automaker, Dunne added.


"Chery is on a level all of its own. It's way out in front of its (Chinese) competition," he said.

The homegrown Chinese companies, such as Chery, Nanjing , Geely, BYD, and Great Wall, are holding their own and have now captured 30 percent of their own home market when joint-venture vehicles are subtracted from the sales totals, Dunne said.


"Brilliance is another company to watch because by working with BMW it has greatly improved its quality," Dunne said.

Another Chinese automaker, BYD, while quite small, is owned by an entrepreneur whose company is the largest maker of cell-phone batteries.


"They are quite interested in making electric vehicles. This is another company to watch," he said. "The Chinese companies are small but they're audacious," he said.

Until now, the conventional wisdom involving China suggested that the large international car companies such Volkswagen, GM, and Toyota, with the help of Chinese partners, would dominate the Chinese market in the years to come. The Chinese companies, while still small, are proving to be aggressive competitors.

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