Chrysler Suicide Watch 18: Chrysler Pops Its Chery

William C Montgomery
by William C Montgomery

Do ya have a hankerin’ for a cheap small car that can’t be satisfied by an offering from Korea, Japan, Europe or the good ‘ole US of A? Me neither. But Chrysler’s CEO thinks you– or someone– does. On July Fourth (no less), Tom LaSorda finally inked a deal with China’s Chery Automobile Company. As early as 2009, Chrysler could be offering Dodge-branded, Chery-manufactured subcompacts in the US and Europe. Target price: $7k. Too good to be true? You bet it is.

About a week before LaSorda was ordering Chinese, Brilliance submitted their would-be Autobahn cruiser to the Germany’s Automobile Association for 40mph head-on and side-impact tests. The sedan failed brilliantly, earning just a one star rating (five possible). The spectacular result for a Chinese-made sedan has raised new questions about Chery’s readiness to produce vehicles for the U.S. market.

You may recall that Chery, China’s eighth largest automaker, survived a brief association with the sterling silver tongued Malcolm Bricklin, whose numerous vehicular importation schemes include the shameful Yugo. The rupture of the Bricklin-Chery deal cleared the path for the Chrysler agreement. As Bricklin walked away from his abortive Chinese venture, his parting comments were prescient.

“The Chinese need to learn that you cannot develop cars for the Chinese market and then upgrade them for the North American Market,” the entrepreneur proclaimed. “You must build for the North American market and then de-option for other markets, never having two standards for quality since great quality is the only option.”

That’s pretty rich for the man whose Canadian-built SV-1 (Safety Vehicle 1) was famous for its leaking gull wing doors. Anyway, assuming Bricklin learned his lesson, Chrysler didn't. The Sino-American partnership plans to upgrade the Chinese market Chery A1 for the U.S. market.

John Humphrey says Chery’s unlikely meet their ambitious 2009 target for U.S. export. In fact, J.D. Power and Associates’ General Manager for the Asia/Pacific region says that none of the Chinese auto manufacturers are prepared to meet U.S. environmental and safety standards.

Humphrey says Chery is closer to being ready than its fellow Chinese manufacturers, but a U.S.-legal Chery A1 is still “at least a product generation away.” If Humphrey’s correct, Chrysler’s re-branded subcompact is about five years out.

In China, the Chery A1 sells for $7100 to $7900. Both LaSorda and Chery’s CEO have announced that the U.S. A1 will sell for $7k. Does this mean that the American market will get a stripped-down version? Not likely.

Industry analysts say that the A1’s $7k price point is highly unrealistic; they estimate that the Chinese export would have to sell for $10k to turn anything even remotely resembling a profit.

George Magliano, automotive research director for Global Insight is adamant. “I don’t think seven is going to work… In the U.S., this thing has got to be styled right, it’s got to perform right, it’s got to have quality, it’s got to have safety. You don’t get that for $7k.”

Erich Merkle, director of forecasting for IRN Inc., predicts that the Chery-Dodge could cost as much as $15k– once laden with features that U.S. consumers demand (e.g. power door locks and windows, and a high end stereo system).

Immediately after Chrysler and Chery signed their agreement, PRC Communist Party bureaucrats gave official approval to the Chrysler-Chery deal ('natch). At around the same time, the partnership garnered the attention of another government.

Reacting to the importation of tainted Chinese pet food and toothpaste into the American market, Congress plans to hold its first hearings on the safety of Chinese-manufactured goods this month.

The recent recall of 450k defective Chinese-made tires sourcing from the Hangzhou Zhongce Rubber Co. also caught the eye of the Senate’s Commerce Committee. Don’t expect any pity on Chinese manufacturers from the Democrats that now control both houses of congress, who’d love nothing more than to slow the tide of imported cars and Chinese car parts that “steal” union jobs.

The smallest car in Chrysler’s current arsenal is the linebacker-sized Caliber, whose base price is roughly twice that of the proposed sticker for Chery A1 import, whose quality and driving dynamics can’t hold a candle to the Honda Fit, Toyota Yaris or Nissan Versa.

While you don’t have to survey a dealer lot stuffed with unsold Aspangos to appreciate Chrysler’s need for a viable subcompact, summoning a federalized Chery A1 seems a distinctly enigmatic choice.

OK, dumb. If the Chinese import's two years too late and twice the targeted price, it’s going to hit the exact same wall as the Caliber. If the Chery A1 gets a one star government crash test rating… In this country, three strikes and you’re out.

William C Montgomery
William C Montgomery

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  • Kjc117 Kjc117 on Jul 16, 2007

    When left on their own the mainland Chinese don't do so well. Yet, when managed by western company, Apple, Toyota, etc..they can produce industry leading products. Of course it is all labor not managerial. Chairman Mao closed the doors to the rest of the world and now they are playing catch up. If all the mainland Chinese do is duplicate everything they will never learn and it does not matter how many engineers they produce. In order to succed Chrysler will have to be the brain power in this relationship. Allow the mainland Chinese to just perform the labor and it may succeed.

  • Middle of the roader Middle of the roader on Jul 23, 2007

    Loser Boy: I wonder if the Adobe inspired those Saturn plastic panels? I think the Adobe's fenders were of a better quality than the ones on my '76 Honda Civic. Cheaper to repair, anyway!

  • Kwik_Shift_Pro4X As much problems as I had with my '96 Chevy Impala SS.....I would love to try one again. I've seen a Dark Cherry Metallic one today and it looked great.
  • Susan O’Neil There is a good reason to keep the Chevrolet Malibu and other 4 door family sedans! You can transport your parents and other somewhat handicapped people comfortably and safety! If someone can stand and pivot you can put them in your car. An armrest in the back seat is appreciated and a handle above the door! Oh…and leather seats so your passenger can slide across the seat! 😊Plus, you can place a full sized wheelchair or walker in the trunk! The car sits a little lower…so it’s doable! I currently have a Ford Fusion and we have a Honda Accord. Our previous cars were Mercury Sables-excellent for transporting handicapped people and equipment! As the population ages-sedans are a very practical choice! POV from a retired handicapped advocate and daughter! 😊
  • Freddie Remember those ads that say "Call your doctor if you still have...after four hours"?You don't need to call your doctor, just get behind the wheel of a CUV. In fact, just look at one.I'm a car guy with finite resources; I can't afford a practical car during the week plus a fun car on the weekend. My solution is my Honda Civic Si 4 door sedan. Maybe yours is a Dodge Charger (a lot of new Chargers are still on dealer lots).
  • Daniel J Interesting in that we have several weeks where the temperature stays below 45 but all weather tires can't be found in a shop anywhere. I guess all seasons are "good enough".
  • Steve Biro For all the talk about sedans vs CUVs and SUVs, I simply can’t bring myself to buy any modern vehicle. And I know it’s only going to get worse.