April 15, 2008
Chrysler switches from China to Japan
Chrysler’s link-up with Nissan for the Japanese company to supply it with small cars for the US and European markets fills as yawning gap in its product line-up.
It also shows that Chinese manufacturers have some way to go before they can compete on equal terms with companies from US, Europe and the rest of Asia.
Chrysler has an agreement with Chery to make cars for the Chinese market and had longer-term plans to export Chery-made vehicles to North America.
But it became clear when the new management team under Cerberus Capital Management reviewed Chrysler’s outlook that Chery would not be able to supply cars that met US safety and environmental standards soon enough.
Now, Tom LaSorda, Chrysler’s vice-chairman, says that it may use the Chery joint venture eventually to make a car that could sell in Latin America.
That sounds like a sensible plan. But the episode illustrates that car technology is complex and fears that the Chinese domestic manufacturers are about to flood the west with vehicles are overblown.
From what I saw at the Detroit Auto Show in January, they are full of ideas and models, but they are a long way from competing with Japan.
