January 5, 2007

Chinese vehicles to be marketed under Chrysler brand names

Auburn Hills, Michigan – Chrysler Group President and CEO Tom LaSorda has announced that the company has reached an agreement in principle with Chinese automaker Chery Sales Co. to distribute Chery-made small vehicles in North America, Europe and possibly other global markets. The agreement is subject to the approval of the DaimlerChrysler Supervisory Board and Chinese authorities.

“Being able to partner with Chery represents a long-term solution to the challenges of how to profitably compete in the small vehicle segment,” LaSorda says. “This supply partnership is part of a new business model that is allowing us to introduce all-new products more quickly, with less capital spending. This announcement reflects the realities of a global industry and DaimlerChrysler’s need to remain competitive in all segments.”

Chrysler group officials say the new vehicles, which will be sold under Chrysler Group brands, will attract very young buyers and entry-level price-point buyers, two segments in which the company doesn’t currently compete. The company says these small, low-price segment vehicles are especially important in more price- and fuel-economy sensitive markets, including Canada, Mexico and most European markets. LaSorda says that although Chrysler Group has historically been most reliant on trucks, minivans and SUVs, it is now moving quickly toward smaller vehicles.

“We already have a well-established relationship with Chery Automobile,” LaSorda says. “Chery is the largest third-party customer of the Chrysler Group/BMW Group Tritec Engine joint venture in Brazil.” Since 2004, Tritec 1.6-litre engines have been exported for use in the Chery A15 and Fengyun.

Chrysler Group designers will work with Chery on the new small vehicles, which are based on yet-to-be-announced Chery platforms, to create unique Chrysler Group styling cues. DaimlerChrysler engineers will also work closely with Chery to ensure these new vehicles meet all applicable safety and emissions standards in market where they are sold. Founded in 1997, Chery is China’s largest exporter of domestically made automobiles.

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