Chrysler and Chery Automotive have ended cooperation talks, the two companies said separately on Tuesday (9 December), both blaming the global economic slowdown.

The deal, announced in July 2007, would have resulted in Chery manufacturing small and subcompact cars - likely reviving the Dodge Hornet nameplate - for Chrysler in China. Initial sales were planned for Latin America in 2008-2009 with North American and European sales starting later. But the venture soon encountered delays over quality issues.

Chrysler told the Wall Street Journal: "Both companies have since gone thought major internal changes and evolution, resulting in different business directions and priorities versus a year ago. Many of the original premises the two companies had, when entering into the agreement no longer apply."

A Chery spokesman said: "After more than one year, the global economic backdrop and market environment have changed substantially.
 
"There have also been some changes and evolution in the two companies. We decided it would do more good for both of us to develop independently."

In the interim, Chrysler has done deals to have Nissan build a mid-size car in Japan for North American sale and will, in turn, supply Nissan with a large truck line in North America. It is also now building a version of its popular North American minivan line which Volkswagen sells there as the Routan.