Chrysler Targets 40,000 Annual Car Sales in China
Chrysler aimed to sell 40,000 vehicles a year in China but ended talks with Chery, leaving its local strategy uncertain.
Chrysler set an ambitious target of selling 40,000 cars a year in China, but its plans took a hit in December 2008 when it ended negotiations with Chery Automobile Company. The US carmaker had been in talks with Chery since mid-2007 to develop a small car for export, including potential sales in China, South America and other markets.
The collapse of the Chery deal followed changes in global business conditions and management at both companies, according to Chrysler. Michael Manley, then head of international sales and marketing, said the original premises for the partnership no longer applied. The agreement would have allowed Chrysler to tap into Chery’s manufacturing base to produce an affordable subcompact to compete with rivals such as the Honda Fit.
Alternative routes to the Chinese market
With the Chery plan abandoned, Chrysler’s route into China remained unclear. The company reportedly held discussions with Great Wall Motor about a possible partnership, but no deal had been announced by the end of 2008. Meanwhile, Chrysler secured an agreement with Nissan in April 2008 to build a subcompact car for sale in North America, but this did not address the Chinese market directly.
Chrysler’s challenge mirrored that of other foreign brands seeking a foothold in China during a period of rapid market growth. Without a local manufacturing partner, Chrysler faced regulatory and cost barriers that could limit its ability to compete with established players. The company’s next steps in China remained uncertain at the close of 2008.
Comparison with other foreign carmakers in China
Chrysler’s 40,000-unit ambition was modest compared to targets set by rivals. For example, Opel planned to sell 30,000 cars in China, while BMW and Brilliance China set far higher volume goals. The fragmented approach highlighted the difficulties non-Chinese brands faced when lacking a strong local partner.
