Chery Automobile on Wednesday said a framework deal with DaimlerChrysler to build Chrysler-branded cars was still proceeding, denying a German paper report it had been halted.
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Reuters noted that Handelsblatt, citing a senior Chery executive, said this week Chery, which reached an initial agreement with Chrysler last year, wants to re-examine the deal.
The decision, the paper said, came after DaimlerChrysler agreed last week to sell money-losing Chrysler to private equity firm Cerberus Capital Management in a $US7.41bn deal.
But a Chery spokesman told Reuters on Wednesday that the newspaper had misquoted his colleague and that the earlier deal with Chrysler Group was progressing.
Under the agreement unveiled in late December, Chery would build small cars under the Chrysler badge for sale in Europe and the US, paving the way for Chery to sell its own-brand vehicles in mature markets eventually.
The Chery spokesman reportedly declined to elaborate on the status of that deal, which still needs Chinese government approval, or confirm whether Chery wants to renegotiate the terms with Chrysler’s new owner.
“I don’t think the deal will be called off,” George Magliano, director of North American auto industry research at Global Insight, told Reuters, adding: “There’s a lot riding for both Chery and Chrysler in this” and noting that this would be the quickest and safest way for the Chinese auto maker to tap the US market, while Chrysler needed a small car.
