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A closer look at Chrysler's latest Chinese deal

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DETROIT - Chrysler LLC's announcement came late Thursday, just before Independence Day and the automaker's two-week shutdown. That made it look like the kind of news release Washington or Wall Street times carefully to miss the news cycle, one that avoids extra scrutiny. Yet on the face of it, it's not a great big announcement: Chrysler and China's Great Wall Motor Company will share distribution and purchase parts with each other.



The timing made me wonder what was underneath the story; has Chrysler China chairman Phil Murtaugh signed some sort of deal to sell off part or all of the automaker? The answer (so far) is an emphatic "no."

Still, you also have to wonder how Murtaugh chose to do business with Great Wall, Chrysler's third Chinese partner. Its second was Chery, the company that's supposed to build its A1 minicar for sale as a Dodge in emerging countries, although the original promise seemed to be that Chery would build small Chryslers, maybe even the Dodge Hornet, for the world. But the Chery deal has been a headache for Chrysler from the start and has suffered many delays. What's more, what Chery is building for Chrysler is the export version of its QQ3, the car that General Motors says is too close a copy of its own Chinese-built Chevrolet Spark (itself based on GM-owned Daewoo's Matiz).

Great Wall's products don't look that much better, although it builds engines under license from Mitsubishi (the Pentastar and Diamond-star, together again?) for use in its Hover crossover ("Unlimited Almightiness & Freedom"), based on the Outlander, and Hover tt ("Fashionable and Personal"), a stretch-limo Hover/Outlander (pictured) powered by a Mitsu 2.4L four and featuring a 15-in. LED TV and "anti-dizzy interior mirror." The Great Wall Gwperi ("Enjoy Delicate Life"), on the other hand, doesn't appear to have any official connection to Renault, although it looks like that maker's Modus.

So prima facie, it's hard to imagine what Chrysler could get out of this deal other than a chance to sell its cars in Great Wall dealerships. After all, Chery still is its manufacturer in China, right? Beijing Automotive Industry Holding Company has been building Jeeps in China since the AMC days (making it Chrysler's first deal there), but Jeeps haven't caught on like Buicks. Maybe V-6 Chrysler 300s or even Sebrings can compete with Buick Park Avenues and Centurys (LaCrosse) there. Chrysler desperately needs to become global and right now, the path to globalism is easier to find in developing countries than in Europe.

What's more, the manufacturing deal with Chery is going nowhere fast. It turns out that, yes, Chery is rebadging its A1 for export as the Dodge Breeze, but Chrysler will limit sale of that car to South American markets, the Web site chinacarnews.com reported last week. The Chery hookup happened under DaimlerChrysler, long before Murtaugh joined Chrysler. The South American Dodge Breeze looks like a quick way to conclude the deal, and its new partnership with Great Wall looks like Murtaugh sees more to that company than Hovers and Gwperis.

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