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Chery, Israel Corp. enter into joint venture

12/27/2007, 8:57 AM

By Drew Johnson

Chery Automobile of China has announced that it will enter into a joint venture with Israel Corp. — an Israeli holding company — to create a new automaker. Israel Corp. currently has holdings in chemicals and shipping. The joint venture — which nearly took a year for approval — will see Israel Corp. taking a 45% stake, which cost the investment company $225 million.

According to The Detroit News, Chery has production agreements with partners in Iran, Malaysia, Bangladesh and Argentina. Chery will also produce small cars for Chrysler.

No word on when the new brand will launch.

Just yesterday, Shanghai Automotive Industry Corp. and Nanjing Automobile Corp. of China announced a merger that will see SAIC taking over Nanjing’s British assembly plant.

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12/27, 10:02 AM

posted by:

Veda

Looks like Chery is on a fast track to become a world car supplier. 10 years from now they maybe able to get 5 star crash test ratings in US and replace the koreans as budget autos.

12/27, 10:29 AM

posted by:

CA36GTP

A bit delusional, Veda? China has been pumping manufactured goods (toys, furnishings, bathoom consumables, etc) into other countries for many decades, and the quality is just as ****ty as it was in the beginning. You expect some radical difference in the auto industry?

12/27, 11:23 AM

posted by:

jayjc08

When I first read the title “Chery, Israel Corp.” I thought the Israel military was ordering vehicles from Chery, I overlooked the Corp standing for a company. I’m glad I’m not right on that one!

CA36GTP- Yes, and they’ve been pumping out those low quality toys and junk in no brand, no name products where quality isn’t really an issue, as long as it doesn’t hurt anyone. On the other hand, when they enter the automobile industry, the brand identity is going to have to make an image for itself, and most of that image is going to be based on reliability. (Sorry, just had to emphasis that)

The Chinese aren’t stupid; most likely they’ll piss around the bush for a few years like Hyundai and then get their quality up to par much like Hyundai’s done, or maybe become like Yugo and get out of the American market altogether.

12/27, 1:04 PM

posted by:

CA36GTP

Jay: Chery has already solved that problem. Why ruin their own name when they can just ruin Chrysler’s?

12/27, 1:32 PM

posted by:

Commodore

When (if) China opens up its car market more, or if the commies allow people to buy other companies, then we will probably see this on a daily basis soon. All of the Chinese automakers (the smaller ones at first) will start being bought out or merging with others.

12/27, 3:10 PM

posted by:

autonut

I haven’t read anything on Chinese opening their auto market to anyone. In their irrational exuberance auto execs jumped into the market without reading the fine print. Fine print isn’t fine any longer: corporation can get out of China its initial investment and not a cent more. All those deals have no profit margin associated with it based on Chinese laws. Furthermore, corporation that produces and sells in the market has to be 51% Chinese (read communist party) owned.
Israeli investment firm is betting on volume distribution probably in Africa and Southern Asia, where there is next boon in auto sales is expected. From Africa investors should be able to get profits out or they can barter for natural resources which are as good as gold (since it is often gold, diamonds and oil).

12/27, 3:33 PM

posted by:

johnnycanuck

I’m already working on my custom license plate ideas for when the first ones show up here. I was kind of thinking of ‘EG ROLS’ or ‘FOO YUK’ or ‘EAT LED’. It’s too bad my province only allows 6 alphanumeric characters; those of you who get 7 have even more options!

12/27, 3:35 PM

posted by:

SwerveEarly

I enjoy a good train wreck, cant wait to see the off spring of this marriage. Is their any product that the Chinese make well or is competetive (in quality terms) in any market.

12/28, 1:09 PM

posted by:

Veda

CA36GTP: I’ve said it on another post. When they make some obscure random name brand goods, they tend to focus on the very lowest price possible which is what you’re referring. If you actually look at the quality of their OEM stuff, they’re comparable to anything else made in other countries. They have the capability to do it, it’s just whatever makes the most business sense to them at the time. The chinese while self-centered aren’t lazy or stupid. If you’ve been following the progress and strategy of some of their biggest companies you’ll realize that. In any case, my point has been to never underestimate them.

01/07, 6:48 PM

posted by:

jackjimturkey

Never

 
 
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