Chinese Company to Sell Cars with Chrysler in U.S.

Daimler Chrysler plans to join with Chinese automaker Chery to produce small vehicles for export to the U.S., among other countries. The move is a signal of the Chinese industry's growing strength, and could anger U.S. autoworkers.

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STEVE INSKEEP, host:

Of course, much of spotlight has been on Toyota's rise in Japan, but Chinese automakers also have ambitions. At the Detroit auto show, a Chinese automaker will debut several new models, and the growing muscle of China's auto industry and rising gas prices are hastening the arrival of Chinese cars on American roads.

NPR's Anthony Kuhn reports from Beijing.

ANTHONY KUHN: A sports utility vehicle called the Cheetah will be debuting in Detroit. Most Americans haven't heard of its manufacturer, China's ChangFeng Company. And the SUVs probably won't be sold here for several years. But ChangFeng is just one of several Chinese carmakers laying long-term plans for the U.S. market.

Last week, Chrysler announced plans to sell Chinese-made subcompact cars in the U.S. China's Cherry Company will make the cars, which will be sold under the Chrysler or Dodge brands. The landmark deal is still pending approval with Chrysler's parent company, DaimlerChrysler. If it clears, the cars could be in the U.S. as early as next year.

U.S. sales of subcompact cars surged by around 50 percent last year, thanks in part to higher gas prices. Chrysler needs a subcompact to compete with its rivals' products. But low sticker prices and high labor costs make it too expensive for Chrysler to manufacture a subcompact in the U.S.

As for Cherry, it exported 50,000 cars last year - up 178 percent over 2005. Most of these went to developing countries, and Cherry is counting on its deal with Chrysler to help it meet the quality and safety standards needed to get a foothold in the American market.

Facing a saturated car market at home, Chinese carmakers nearly doubled their exports last year. China's government recently said it plans to boost the country's share of the global auto trade from its current 0.7 percent to 10 percent within 10 years.

Anthony Kuhn, NPR News, Beijing.

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