Some news regarding collaboration between DaimlerChrysler and Chery. Previously it was reported that Chrysler will name it’s subcompact car partner by the end of 2006, with talks currently on-going with a few partners. Subcompacts which are known for frugal fuel consumption – important in these high fuel price days – account for 1% of the overall US market currently, but it is expected to double in amount next year.

DaimlerChrysler is said to be in final talks to build cars in China and export them to the US under the Dodge brand to take advantage of the cheaper costs there. This move will follow Honda Motor Co’s recent recision to export vehicles built in China. However, DaimlerChrysler is keeping mum on the issue, and it is said that this collaboration is very controversial within DaimlerChrysler, with opponents questioning whether cars produced in China by Chery can meet quality standards.

Other partners being considered are Mitsubishi Motors Corp, and Hyundai Motor Co Ltd. “We know we can’t do it alone. The capital expense alone would be very high, said Chrysler Group CEO Tom LaSorda.

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