DaimlerChrysler’s supervisory board has given the green light to the making of small Chrysler cars in China but cautioned that government approval is still needed.


The board approved the framework of a limited partnership to develop small vehicles between Chrysler Group and Chery Motor Company of China and said that, although Chinese government approval is still needed, it expects a final pact to be signed by the end of March.


Under the “non-equity partnership”, Chery-built vehicles will be distributed as Chrysler branded models, primarily in North America and western Europe.


Chrysler said the partnership would allow it to become a bigger player on the global automotive stage by giving it access to products in new segments more quickly, with less capital spending.


“Small vehicles such as these will allow Chrysler Group brands to compete in segments in which the brands do not currently compete, and which are especially important in price- and fuel-economy-sensitive markets,” the board said in a statement.


Some 67% of all vehicles sold outside of North America are in these segments. Chrysler Group’s major competitors in the US and western Europe have similar arrangements with Asian manufacturers for vehicles in these segments.”