Richard Chow-Wah is vice president of powertrain manufacturing
China is a critical test ground for Chrysler LLC as we seek to expand our sales outside North America. We plan to license vehicle production, partner in manufacturing and build cars in joint ventures with local partners to fuel global growth. Why?
There are two reasons. First, we want to sell vehicles in high-growth countries and find partners to help us produce vehicles we currently don’t make, such as A- and B-segment vehicles.
Recently, the first Chrysler Grand Voyager minivan rolled off the assembly line at a plant in southern China owned by South East Motors Inc. under a licensing agreement reached in 2005 with Chrysler. Licensed manufacturing brings many benefits to Chrysler, including the ability to bring a vehicle to market very quickly. You'll see Chrysler repeat this business model in other markets, as well.
Joint-venture deals with other car manufacturers are also important, such as our joint venture making Jeep vehicles and sedans in China with Beijing Automotive Industry Holding Co. Chrysler is also looking to start a second joint venture to make cars for the China market, where passenger-car sales grew 35% last year. There are a number of options for local partners, although I can’t give you any details right now.
Chrysler already has a manufacturing deal with Chery Automotive. Under that agreement, Chrysler will export a series of small, Chery-made cars and sell them under the Dodge brand name. The first models could be on sale in Latin America and other developing markets in about a year. We’re aiming to sell them in the U.S. and Western Europe by the end of 2009. We’ll work hard to keep the price low to open up a customer base that today we don't serve.
There have been some highly publicized cases of hazardous Chinese-made products being sold in the U.S. lately. We realize this could affect the image of Chinese-built cars as well, but we promise that these cars will meet safety requirements and customer quality standards in the markets where they are sold. A team of Chrysler engineers is working alongside our partners to make sure that happens.
We continue to look for different opportunities for joint venture partners or alliances. The only requirement is that these agreements bring value to Chrysler and our customers.
