Chrysler’s plans to use China as a low-cost small car export base have hit quality obstacles according to a report in the Financial Times.
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Chery’s plant in Wuhu was supposed to be making a small car for Chrysler for launch in Latin America in 2008-09, and in North America and Europe a year later.
“Since we signed [a memorandum of understanding] Chrysler and Chery have been working very, very hard to execute that,” Phil Murtaugh, chief executive of Chrysler’s Asia operations, told the Financial Times.
However, he added: “Both [companies] feel that our products are not quite ready to meet the requirements of those [export] markets and we are working very hard to solve [the problems].”
He said the two companies did not have a timetable for when the cars would be exported nor an agreement on how many models would be produced.
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By GlobalDataMr Murtaugh said the venture would initially produce one model based on a Chery vehicle of a size comparable to the Honda Fit.
Mr Murtaugh said that one of the difficulties facing the car was bringing its quality up to the standard of markets where regulatory environments were very different from China’s.
“Obviously, quality is an issue that has to be addressed and both Chrysler and Chery have to be convinced that we are ready to meet the market demands,” he told the newspaper.
See also: EMERGING MARKETS ANALYSIS: Chrysler finds its place in the new world order
