Due to its sale, Chrysler may have to renegotiate its agreement with Chery, The Detroit News reported Tuesday. Chrysler management is confident they can keep the deal together.
According to The Detroit News, framework negotiations between the two automakers were complete, but negotiations over specific projects such as a Dodge subcompact car are only in the earliest stages.
The Chery arrangement is critical to Chrysler analysts say because it offers Chrysler a low cost manufacturing partner critical to competing profitably in the compact and subcompact markets. Currently Chrysler doesn’t have an entry in the subcompact market, and fields only the Caliber and PTCruiser in the compact market segment.
Magazine reviews seem to indicate that neither of those two entries is seen as competitive in the compact car market.
Another possible foreign alliance could be between Mitsubishi and Chrysler, analysts speculated in the piece. Chrysler and Mitsubishi have worked together in the past and are currently partners in the development of the Phoenix V6.
